3. Project L costs $70,000, its expected cash inflows are $13,000 per year for 8 years,...

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Question

3. Project L costs $70,000, its expected cash inflows are $13,000 per year for 8 years,...

3. Project L costs $70,000, its expected cash inflows are $13,000 per year for 8 years, and its WACC is 10%. What is the project's payback? Round your answer to two decimal places. (Please show work so I understand the process.)

_________ years

Please do not answer if you are not sure thank you! :)

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Answer 1

Answer #1

in the given problem we have uniform cash inflows, the pay back period will be equal to = cost / expected cash inflows

=>$70,000 / 13,000

=>5.38461538461

=>5.38 years.....(rounded to two decimals)

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Answer 2

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