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emmasim [6.3K]
3 years ago
8

A project has an initial cost of $2,400. The cash inflows are $0, $1,600, $1,100, and $700 over the next four years, respectivel

y. What is the payback period?
Business
1 answer:
lesya692 [45]3 years ago
7 0

Answer:

It will take 2.73 years to cover the initial investment.

Explanation:

<u>The payback period is the time required to cover the initial investment:</u>

Year 1= 0 - 2,400= -2,400

Year 2= 1,600 - 2,400= -800

Year 3= 1,100 - 800= $300

<u>To be more accurate:</u>

(800/1,100)= 0.73

It will take 2.73 years to cover the initial investment.

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D. total variable costs

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3 years ago
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