Question

An investment project provides cash inflows of $675 per year for eight years.

What is the project payback period if the initial cost is $1,500? (Enter 0 if the project never pays back. Do not round intermediate calculations and round your answer to 2 decimal places. (e.g., 32.16))

Answer 1

Answer: 2.22 (years)

Explanation:

payback period = initial investment / Annual cash inflow (ONLY when cash inflows are equal)

payback period = 1500/675 = 2.22