You are considering a project with an initial cost of $7,500. What is the payback period for this project if the cash inflows are $1,100, $1,640, $3,800, and $4,500 a year over the next four years, respectively? A. 3.21 years B. 3.28 years C. 3.36 years D. 4.21 years E. 4.29 years
Added by Jordi I.
Step 1
First, we need to calculate the cumulative cash inflows for each year. Year 1: $1,100 Year 2: $1,100 + $1,640 = $2,740 Year 3: $2,740 + $3,800 = $6,540 Year 4: $6,540 + $4,500 = $11,040 Show more…
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