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Consider an Investment with an Initial Cost of $20,000 and Is

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Consider an investment with an initial cost of $20,000 and is expected to last for 5 years.The expected cash flow in years 1 and 2 are $5,000,in years 3 and 4 are $5,500 and in year 5 is $1,000.The total cash inflow is expected to be $22,000 or an average of $4,400 per year.Compute the payback period in years.

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Definitions:

High Blood Pressure

A condition where the long-term force of the blood against artery walls is high enough that it may eventually cause health problems, such as heart disease.

American Medical Association

A professional association of physicians in the United States dedicated to promoting the art and science of medicine and the betterment of public health.

Binomially Distributed

A probability distribution of a variable that represents the number of successes in a fixed number of independent trials, with only two possible outcomes.

Random Variable

A random variable is a variable whose values are outcomes of a random phenomenon.

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