Question

(1) An investment project provides cash inflows of $660 per year for eight years. What is the project payback period if the initial cost is $1,825? (Do not round intermediate calculations.

(2) What is the project payback period if the initial cost is $3,550? (Do not round intermediate calculations. if the initial cost is $5,400? (Do not round intermediate calculations.

Answer 1

Instructions are listed below.

Step-by-step explanation:

Giving the following information:

A) An investment project provides cash inflows of $660 per year for eight years. The initial cost is $1,825

660*2= 1,320

Rest= 1,825- 1,320= 505

Pay-back period= 2 years + (505/660)= 2.77 years

B) What is the project payback period if the initial cost is $3,550

Pay-back period= 5 years + (250/660)= 5.38 years

C) if the initial cost is $5,400

Pay-back period= 8 years + (120/660)= 8.18 years