If a project costs $120,000 and is expected to return $29,000 annually, how long does it take to recover the initial investment? What would be the discounted payback period at /= 16%? Assume that the cash flows occur continuously throughout the year. The payback period is years. (Round to one decimal place.)

If a project costs $120,000 and is expected to return $29,000 annually, how long does it take to recover the initial investment? What would be the discounted payback period at /= 16%? Assume that the cash flows occur continuously throughout the year. The payback period is years. (Round to one decimal place.)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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If a project costs $120,000 and is expected to return $29,000 annually, how long does it take to recover the initial
investment? What would be the discounted payback period at /= 16%? Assume that the cash flows occur
continuously throughout the year.
The payback period is years. (Round to one decimal place.)

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Step 1: Calculate the payback period

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Step 2: Sum up the discounted cash flows until they equal the initial investment.

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Step 3: Interpolate the payback period using linear interpolation:

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