Question

An investment project provides cash flows of $1,190 per year for 10 years. If the initial cost is $8,000, what is the payback period?

Answer 1

6.72 years

Step-by-step explanation:

Payback period calculates the amount of time it takes to recover the amount invested in a project from its cumulative cash flows

payback period = amount invested / cash flow

$8000 / $1,190 = 6.72 years