The Golden Goose is considering a project with an initial cost of $46,700. The project will produce cash inflows of $10,000 for

Question

2 years ago

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the first year and $12,000 per year for the following four years. What is the payback period

1 answer:

MrRissso [65] · Answer 1 · 2023-03-08T11:06:43+03:00

The payback period is 4.06 years.

<h3>What is the payback period?</h3>

Payback calculates the amount of time it takes to recover the amount invested in a project from it cumulative cash flows

Amount recovered in the first year = 46,700 - 10,000 = 36,700

Number of years it would take to recover 36,700 = 1 + (36700 / 12,000) = 4.06 years

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