2 FSDNPT (HW) - e 12.735703 years Correct Answer 12.724420...

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You are considering investing in an overseas project with estimated yearly cash inflows totaling $5,737 per year for 20 years. If the initial investment required is equal to $73,000, what is the project’s payback period? a. 12.0 years b. 13.0 years c. 12.724420 years d. 15.717808 years
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Unformatted text preview: e. 12.735703 years Correct Answer: 12.724420 years Algebraic Solution: Initial Investment ÷ yearly inflow = payback period $73,000 ÷ $5,737 per year = 12.724420 years Notes: Since project inflows are received throughout the year, do not round up to the next year....
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