Your firm is considering investing in a project that will require an initial outlay of $10,000. You expect the project to have an operating life of four years. You expect it to generate the following cash flows: (1) $3,000 in the first year, (2) $4,000 in the second year, (3) $2,500 in the third year, and (4) $2,000 in the final year. What is the Payback period for the project? O2.75 years 04.00 years 04.15 years O 3.25 years

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
Section: Chapter Questions
Problem 1PS
icon
Related questions
icon
Concept explainers
Topic Video
Question
Your firm is considering investing in a project that will require an initial outlay of $10,000. You expect the project to have an operating life of four years. You expect it to generate the following cash flows: (1) $3,000
in the first year, (2) $4,000 in the second year, (3) $2,500 in the third year, and (4) $2,000 in the final year.
What is the Payback period for the project?
2.75 years
4.00 years
4.15 years
O 3.25 years
Transcribed Image Text:Your firm is considering investing in a project that will require an initial outlay of $10,000. You expect the project to have an operating life of four years. You expect it to generate the following cash flows: (1) $3,000 in the first year, (2) $4,000 in the second year, (3) $2,500 in the third year, and (4) $2,000 in the final year. What is the Payback period for the project? 2.75 years 4.00 years 4.15 years O 3.25 years
Expert Solution
steps

Step by step

Solved in 3 steps

Blurred answer
Knowledge Booster
Capital Budgeting
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
Essentials Of Investments
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
FUNDAMENTALS OF CORPORATE FINANCE
FUNDAMENTALS OF CORPORATE FINANCE
Finance
ISBN:
9781260013962
Author:
BREALEY
Publisher:
RENT MCG
Financial Management: Theory & Practice
Financial Management: Theory & Practice
Finance
ISBN:
9781337909730
Author:
Brigham
Publisher:
Cengage
Foundations Of Finance
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
Fundamentals of Financial Management (MindTap Cou…
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education