An investment project provides cash inflows of 1325 per year

An investment project provides cash inflows of $1,325 per year for eight years. (Do not round intermediate calculations. Enter 0 if the project never pays back. Round your answers to 2 decimal places (e.g., 32.16).)

Solution

Requirement 1)

P=-4,200
P=-2,875
P=-1550
P=-225
P=1100
Payback = $4200/$1325
= 3.17 years Answer

Requirement 2)

P=-5,250
P=-3925
P=-2600
P=-1275
P=50
Payback = $5250/$1325
= 3.96 years Answer

Requirement 3)

P=-11600
P=-10275
P=-8950
P=-7625
P=-6300

P₅=-4975

P₆=-3650

P₇=-2325

P₈=-1000

Total cash inflows = 8($1325)
Total cash inflows = $10600
If the initial cost is $11600, the project never pays back. Answer