There is a project with the following cash flows: Year Cash Flow 0 -$28,400 1 $8,300 2 $8,350 3 $7,750 4 $6,400 What is the payback period? Options: 3.91 years 3.84 years 2.48 years 4.00 years 3.63 years
Added by Pamela C.
Step 1
Calculate the cumulative cash flow for each year: Year 0: -$28,400 Year 1: -$20,100 ($8,300 - $28,400) Year 2: -$11,750 ($8,350 - $20,100) Year 3: -$4,000 ($7,750 - $11,750) Year 4: $2,400 ($6,400 - $4,000) Show more…
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