An investment project provides cash inflows of $1,175 per year for eight years.

Question

An investment project provides cash inflows of $1,175 per year for eight years. (Enter 0 if the project never pays back. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)

What is the project payback period if the initial cost is $3,900?

  
Payback period             years

What is the project payback period if the initial cost is $4,950?

  
Payback period             years

What is the project payback period if the initial cost is $10,400?

  
Payback period             years

Explanation / Answer

Payback=Initial investment/Annual cash flows

1.Payback=3900/1175=3.32 years

2.Payback=4950/1175=4.21 years

3.Payback=10400/1175=0.

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