Question

A project has estimated annual net cash flows of $53,200. It is estimated to cost $250,040. Determine the cash payback period. Round your answer to one decimal place.

Answer 1

The cash payback period for the project is calculated by dividing the total cost of the project by the annual net cash flows, resulting in a payback period of 4.7 years.

Step-by-step explanation:

The student has asked to determine the cash payback period for a project with estimated annual net cash flows of $53,200 and a cost of $250,040. To calculate the cash payback period, we divide the total investment by the annual net cash flows. Therefore, the cash payback period is $250,040 ÷ $53,200 = 4.7 years. We round this to one decimal place as requested.