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The NB Corporation: Regular Payback

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The NB corporation is considering a project which has an up-front cost paid today at t=0. The project will generate positive cash flows of $70,000, a year at the end of each of the next five years. The project's NPV is $90,000 and the company's WACC is 12%. What is the project simple, regular payback?

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This solution is comprised of a detailed, step by step explanation showing how to calculate the regular payback. All formulas and calculations are shown, along with an explanation of what the regular payback value is.

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The NB corporation is considering a project which has an up-front cost paid today at t=0. The project will generate positive cash flows of $70,000, a year at the end of each of the next five years. The project's NPV is $90,000 and the company's WACC is 12%. What is the project simple, regular payback?

First, we can draw the time line for the above project as follows:

Year 0 ...

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