A project with an initial cost of $24,800 is expected to generate cash flows of $5,900,...

Free

90.2K

Verified Solution

Question

Finance

A project with an initial cost of $24,800 is expected togenerate cash flows of $5,900, $8,000, $8,750, $7,650, and $6,700over each of the next five years, respectively. What is theproject's payback period? Multiple Choice 3.28 years 3.39 years3.49 years 3.75 years 3.65 years

Answer & Explanation Solved by verified expert

4.2 Ratings (660 Votes)

3.28 years

Payback period is the time within which cost of project is recovered back.

Year	Cash flow	Cumulative Cash flow
0	$ -24,800	$ -24,800
1	5,900	-18,900
2	8,000	-10,900
3	8,750	-2,150
4	7,650	5,500
5	6,700	12,200

Payback period		=	3+(2150/7650)
		=	3.28 Years

Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:

Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!

Become a Member

Transcribed Image Text

A project with an initial cost of $24,800 is expected togenerate cash flows of $5,900, $8,000, $8,750, $7,650, and $6,700over each of the next five years, respectively. What is theproject's payback period? Multiple Choice 3.28 years 3.39 years3.49 years 3.75 years 3.65 years

A project with an initial cost of $24,800 is expected to generate cash flows of $5,900,...

Free

90.2K

Verified Solution

Question

Finance

A project with an initial cost of $24,800 is expected togenerate cash flows of $5,900, $8,000, $8,750, $7,650, and $6,700over each of the next five years, respectively. What is theproject's payback period? Multiple Choice 3.28 years 3.39 years3.49 years 3.75 years 3.65 years

Answer & Explanation Solved by verified expert

Get Answers to Unlimited Questions

Membership Benefits:

Transcribed Image Text

Other questions asked by students