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Payback period : Academic response

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Question 16: (1 point)
(Ignore income taxes in this problem.) Chee Company has gathered the following data on a proposed investment project:

Investment required in equipment $211,218
Annual cash inflows $47,000
Salvage value $0
Life of the investment 10 years
Required rate of return 11%

The payback period (by using Payback Method) for the investment is closest to:

4.5 years
3.3 years
9 years
5.7 years

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Solution Summary

The following posting provides the steps to calculate the payback period.

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nvestment required in equipment $211,218
Annual cash inflows $47,000
Salvage value $0
Life of the investment 10 years
Required rate of return 11%

The payback ...

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