A Firm Is Evaluating a Potential Investment That Is Expected

question 117

Multiple Choice

A firm is evaluating a potential investment that is expected to generate cash flows of $100 in years 1 through 4 and $400 in years 5 through 7. The initial investment is $750. What is the payback for this investment?

• A) 4.88 years
• B) 4.48 years
• C) 5.88 years
• D) 5.48 years