An Investment with an Initial Cost of $15,000 Produces Cash

question 28

Multiple Choice

An investment with an initial cost of $15,000 produces cash flows of $5,000 annually for 5 years. If the cash flow is evenly spread out over the year and the firm can borrow at 10%,the discounted payback period is _____ years.

• A) 3
• B) 3.2
• C) 3.75
• D) 4
• E) 5