If a project requires an initial investment of $10,000 and is expected to generate cash flows of$4,000 per year for 4 years, what is the payback period?a) 2 yearsb) 2.5 yearsc) 3 yearsd) 4 years

Explanation of Initial Investment:The initial investment is the upfront amount of money required to…

Answered: If a project requires an initial…

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter19: Capital Investment

Section: Chapter Questions

Problem 19E

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If a project requires an initial investment of $10,000 and is expected to generate cash flows of $4,000 per year for 4 years, what is the payback period? a) 2 years b) 2.5 years c) 3 years d) 4 years