Payback: You Have Been Asked to Analyze an Investment Project

question 58

Multiple Choice

Payback: You have been asked to analyze an investment project. The project's cost is $180,000. Cash inflows are projected to be: year 1 = $55,000, year 2 = $65,000; year 3 = $75,000; year 4 = $85,500; year 5 = $95,000.
What is the investment project's payback? (Round off to the nearest (0.1 years)

• A) 4.1 years
• B) 1.6 years
• C) 3.5 years
• D) 2.8 years

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Definitions:

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