An investment project provides cash inflows of $720 per year for eight years. Wh

Question

An investment project provides cash inflows of $720 per year for eight years. What is the project payback period if the initial cost is $1,925? What if the initial cost is $3,750? What if it is $5,800?

What is the project payback period if the initial cost is $1,925? (Enter 0 if the project never pays back. Round your answer to 2 decimal places. (e.g., 32.16))

What is the project payback period if the initial cost is $3,750? (Enter 0 if the project never pays back. Round your answer to 2 decimal places. (e.g., 32.16))

What is the project payback period if the initial cost is $5,800? (Enter 0 if the project never pays back. Round your answer to 2 decimal places. (e.g., 32.16))

An investment project provides cash inflows of $720 per year for eight years. What is the project payback period if the initial cost is $1,925? What if the initial cost is $3,750? What if it is $5,800?

Explanation / Answer

Answer:

Payback = Initial investment / cash inflow

What is the project payback period if the initial cost is $1,925? (Enter 0 if the project never pays back. Round your answer to 2 decimal places. (e.g., 32.16))

Payback = 1925 / 720 = 2.67 years

What is the project payback period if the initial cost is $3,750? (Enter 0 if the project never pays back. Round your answer to 2 decimal places. (e.g., 32.16))

Payback = 3750 / 720 = 5.21 years

What is the project payback period if the initial cost is $5,800? (Enter 0 if the project never pays back. Round your answer to 2 decimal places. (e.g., 32.16))

Payback = 5800 / 720 = 0

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