Question

A 3-year project costs $800 and has cash inflows of $500 in Year 1, $400 in Year 2, and $300 in Year 3. What is the project’s payback period?

Group of answer choices

1.75 years

2.00 years

3.25 years

2.50 years

Answer #1

To calculate the payback period, we need to find the time that the project has recovered its initial investment. After 1 year, the project has created:

$500

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

$800 - $500 = $300

in cash flows. During the second year, the cash flows from the project will be $400. So, the payback period will be 1 year, plus what we still need to make divided by what we will make during the second year. The payback period is:

Payback = 1 + ($300 / $400) = **1.75 years**

Mansi Inc. is considering a project that has the following cash
flow data. What is the project's payback?
Year 0 1 2 3
Cash
flows -$750 $300 $325 $200
Hint: Payback period: The number of years required to recover a
project’s cost. Cumulative cash flow computation ignores the time
value of money by using actual cash flows.
Group of answer choices
2.50 years
2.36 years
2.63 years
2.42 years
2.83 years

Project A has a $500 investment and cash inflows of $200, $250
and $300 in years 1-3. Project B has a $400 investment and cash
inflows of $300, $100 and $200 in years 1-3. Given this
information, calculate its cross-over IRR.
a. 12.46%
b. 11.46%
c. 14.46%
d. 13.46%
e. 10.46%

The NPV and payback period
Suppose you are evaluating a project with the cash inflows shown
in the following table. Your boss has asked you to calculate the
project’s net present value (NPV). You don’t know the project’s
initial cost, but you do know the project’s regular, or
conventional, payback period is 2.50 years.
The project's annual cash flows are:
Year
Cash Flow
Year 1
$400,000
Year 2
600,000
Year 3
500,000
Year 4
475,000
If the project’s desired rate...

Suppose you are evaluating a project with the cash inflows shown
in the following table. Your boss has asked you to calculate the
project’s net present value (NPV). You don’t know the project’s
initial cost, but you do know the project’s regular, or
conventional, payback period is 2.50 years.
The project's annual cash flows are:
Year
Cash Flow
Year 1
$375,000
Year 2
550,000
Year 3
400,000
Year 4
300,000
If the project’s desired rate of return is 9.00%, the...

1. Project K costs $45,000, its expected cash inflows are
$15,000 per year for 9 years, and its WACC is 11%. What is the
project's NPV? Round your answer to the nearest cent. 2. Project K
costs $59,542.90, its expected cash inflows are $12,000 per year
for 10 years, and its WACC is 14%. What is the project's IRR? Round
your answer to two decimal places. 3. Project K costs $75,000, its
expected cash inflows are $15,000 per year for...

1.
Z Enterprises is considering a project that has the following cash
flow data. what is the payback period?
year 0: -1000 year 1: 500. yr 2: 500 yr 3: 500
2. Z Enterprises is considering a project that has the
following cash flow data. what is the payback period? what is the
npv? (cost of capital is 11%)
year 0: -1000
yr 1: 500
yr 2: 300
yr 3: 800

1.Project K costs $57,890.94, its expected cash inflows are
$14,000 per year for 8 years, and its WACC is 9%. What is the
project's IRR? Round your answer to two decimal places.
2.Project K costs $35,000, its expected cash inflows are $10,000
per year for 8 years, and its WACC is 9%. What is the project's
discounted payback? Round your answer to two decimal places.
3.Project K costs $45,000, its expected cash inflows are $11,000
per year for 10 years,...

1. Payback period
a.) Project K costs $40,000, its expected cash inflows are
$10,000 per year for 7 years, and its WACC is 14%. What is the
project's payback? Round your answer to two decimal places.
________ years
b.) Project K costs $50,000, its expected cash inflows are
$12,000 per year for 8 years, and its WACC is 12%. What is the
project's discounted payback? Round your answer to two decimal
places.
________ years
*** Will you guys please show...

2. A project has the following cash flows
C0
C1
C2
C3
($1000)
$300
$400
$600
What is the project’s payback period?
Year
0
1
2
3
Cash Flow
($1000)
$300
$400
$600
Cumulative
($1000)
($700)
($300)
300
a. Calculate the projects NPV at 10%.
b. Calculate the project’s PI at 10%.
c. Calculate an IRR for the project in question 2
How would you answer a,b, and c in excel? I am getting...

1. Project L costs $60,000, its expected cash inflows are
$14,000 per year for 6 years, and its WACC is 9%. What is the
project's payback? Round your answer to two decimal places.
2. Project L costs $40,955.09, its expected cash inflows are
$9,000 per year for 10 years, and its WACC is 13%. What is the
project's IRR? Round your answer to two decimal places.

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