Question

Based on the following cash flows, calculate the payback period.

Year
CF

0
-$1,358

1
$369

2
$220

3
$92

4
$356

5
$530

Enter your answer rounded off to two decimal points.

Answer #1

To calculate the payback period, we need to find the time that the project has recovered its initial investment. After four years, the project has created:

$369 + $220 + $92 + $356 = $1,037

in cash flows. The project still needs to create another:

$1,358 - $1,037 = $321

in cash flows. During the fifth year, the cash flows from the project will be $530. So, the payback period will be four years, plus what we still need to make divided by what we will make during the fifth year. The payback period is:

Payback = 4 + ($321 / $530) = **4.61 years**

Find the discounted payback period for the following cash
flows.
Year
Cash Flow
0
-319,000
1
122,000
2
133,000
3
135,000
4
395,000
Assume a discount rate of 13%.
Round your answer to two decimal places.

Q1.) What is the payback period for the following set of cash
flows?
Year Cashflow
0 -$3900
1 1500
2 1400
3 1800
4 1800
Q2.)
An investment project costs $14,400 and has annual cash flows of
$4,200 for six years. What is the discounted payback period if the
discount rate is 5 percent?
Q3.)A project has projected cash flows of –$28,800, $10,400,
$13,100, $15,000, $12,100 and –$8,600 for years 0 to 5,
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What is the payback period for the following set of cash
flows?
Year
Cash flow
0
-$40,000 (it is minus!)
1
$10,000
2
$5,000
3
$20,000
4
$5,000
5
$10,000
A.
2 years
B.
4 years
C.
3 years
D.
1 year
E.
5 years

What is the payback period for the following set of cash flows?
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What is the payback period for the following set of cash
flows?
Year
Cash Flow
0
$ -5,800
1
2,600
2
1,300
3
1,400
4
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What is the payback period?
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0
1
2
3
4
CF
-5,199
2,627
3,082
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18 gazillion

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When the annual cash flows are unequal, the payback period is
computed by adding the annual cash flows until such time as the
original investment is recovered. If a fraction of a year is
needed, it is assumed that cash flows occur evenly within each
year.
The steps for determining the payback period with uneven cash
flows is as follows:
Add the annual cash flows to one another until the investment
is recovered.
For each...

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Cash Flow
0
−$ 2,400
1
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1,600
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Year CF ($)
0) -5,000
1). 2,700
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Also upload your excel files showing your work.

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YEAR CASH FLOWS
0-( -R200 000)
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