Final answer:
Without specific cash flow data, we cannot calculate the payback period for Anchor Gaming Inc.'s project. The payback period is used to determine when the cash flows from an investment equal the initial investment cost. Investment decisions are influenced by the cost of capital and potential societal returns.
Step-by-step explanation:
The student's question is about calculating the payback period for a project with a given cash flow and a weighted average cost of capital of 14%. The payback period is a financial metric used to determine the time it takes for an investment to generate an amount of cash flow equal to the initial investment cost. However, without the specific cash flow data for the Anchor Gaming Inc. project, calculating an accurate payback period is not possible. To calculate the payback period, you would typically sum up the cash flows from the project until they equal the initial investment, and then determine the time frame in which this occurs.
In this scenario, Anchor Gaming Inc.'s intention to invest in a project would involve considering its cost of financial capital, which is influenced by the interest rate. As mentioned, if the interest rate is 9% and the firm can add a societal return of 5%, the effective rate of return for the firm is reduced to 4%, influencing its investment decisions.