Question

A project that costs $17,000 today will generate cash flows of $4,100 per year for seven years. What is the project's payback period

Answer 1

the payback period is 4.15 years

Step-by-step explanation:

The computation of the payback period is shown below:

= Initial investment ÷ Generated cash flows

= $17,000 ÷ $4,100

= 4.15 years

By dividing the initial investment from the annual cash flows per year we can get the payback period

hence, the payback period is 4.15 years

We simply applied the above formula so that the correct value could come

And, the same is to be considered