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Please show work! An investment project provides cash flows of $1,515 per year for 10 years. If the initial cost is $8,0...

Please show work!

An investment project provides cash flows of $1,515 per year for 10 years. If the initial cost is $8,000, what is the payback period?

A.

3.36 years
B.

5.28 years
C.

6.72 years
D.

8.13 years
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Answer #1

It is simple question.

Cashflow per year is 1515.

Hence after 5 years, it will be 7575.

Now remaining dollars is 8000-7575 which is 425.

425/1515 which is 0.28 years.

So a total of 5.28 years is required to payback.

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