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An investment project provides cash inflows of $620 per year for 12 years. (A)what is the...

An investment project provides cash inflows of $620 per year for 12 years. (A)what is the project payback period if the initial cost is 1,860?

(b) what is the project payback period if the initial cost is 3,658?

(c) what is the project payback period if the initial cost is 8,060?

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Answer #1
A) Payback Period = Initial investment / annual cash inflow
= $1860/620
=3 years
B) Payback Period = Initial investment / annual cash inflow
= $3658/620
=5.9 years
C) Payback Period = Initial investment / annual cash inflow
= $8060/620
=13 years
Payback period = indefinite
that means investment will not be recovered.
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