You are evaluating an investment project costing $11,000 initially. The project will lose 5,000 in year 1 and earn 9,000 in year 2 and then create net cashflows of 1,600 per year for 8 more years, according to the following 10-year schedule: Year Cash Flow 0 1 2 3 -11,000 -5,000 9,000 1,600 1,600 Note, that the final cell abbreviates years 4 through 10 for formatting reasons. What is the payback period for this project (1+ decimals)? 4-10

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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Subject  :- Finance 

You are evaluating an investment project
costing $11,000 initially. The project will
lose 5,000 in year 1 and earn 9,000 in
year 2 and then create net cashflows of
1,600 per year for 8 more years,
according to the following 10-year
schedule:
Year
Cash
Flow
O
1
2
3
-11,000 -5,000 9,000 1,600 1,600
Note, that the final cell abbreviates years
4 through 10 for formatting reasons.
What is the payback period for this
project (1+ decimals)?
4-10
Transcribed Image Text:You are evaluating an investment project costing $11,000 initially. The project will lose 5,000 in year 1 and earn 9,000 in year 2 and then create net cashflows of 1,600 per year for 8 more years, according to the following 10-year schedule: Year Cash Flow O 1 2 3 -11,000 -5,000 9,000 1,600 1,600 Note, that the final cell abbreviates years 4 through 10 for formatting reasons. What is the payback period for this project (1+ decimals)? 4-10
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