Question

An entrepreneur invests in his dream business of selling golf-carts. The initial investment is $230,064.00. The entrepreneur expects to generate an annual after-tax cash flow of $55,966.00 in running this business. How long before the project will pay back

Answer 1

The payback period for the entrepreneur's investment in a golf-cart selling business would be approximately 4.11 years, calculated by dividing the initial investment ($230,064.00) by the expected annual after-tax cash flow ($55,966.00).

Step-by-step explanation:

The student is asking about the payback period of an investment in a business selling golf-carts. To calculate the payback period, we divide the initial investment by the annual after-tax cash flow. The entrepreneur invested $230,064.00 and expects an annual cash flow of $55,966.00. Therefore, the payback period is calculated as follows:

Divide the initial investment by the annual cash flow: $230,064.00 / $55,966.00.The result of this division will give us the number of years it will take for the investment to pay back.

The calculation is $230,064.00 / $55,966.00 = approximately 4.11 years. Hence, it will take a bit over four years for the entrepreneur to recover the initial investment from the annual after-tax cash flows from the business.

Answer 2

Folly Beach has long been the epicenter of fun and sun for generations of College of Charleston students.

Taylor Denny (left), Jake Cotreau (center) and Matthew Coda (right).

Taylor Denny (left), Jake Cotreau (center) and Matthew Coda (right).

But for three recent graduates, the quirky little beach town is all about business.

By the time alumni Matthew Coda, Jake Cotreau and Taylor Denny walked across the Cistern stage to receive their diplomas in May 2014 they already knew how and where they planned to begin their careers.

This month the three young entrepreneurs launched Golden Sun Taxi, a fleet of three solar-powered, golf cart taxis that shuttle passengers along the sandy streets of Folly Beach. Aimed primarily at tourists, the business is believed to be the first of its kind in the United States.