Green Cars Inc is considering a project with the following expected cash flows

Finance Dec 21, 2020

Green Cars Inc is considering a project with the following expected cash flows. Year 0 1 2 3 Cash Flow -S75,000 $18,500 $18,500 $18,500 $18.500 $12.500 $12,500 $12.500 S12,500 4 5 6 7 8 What is the payback period of this project? 1.28 years 2.28 years 4.08 years 3.28 years

Expert Solution

Ans 4.08 years

Year	Cash Flow	Cumulative Cash Flow
0	-75000	-75000
1	18500	-56500
2	18500	-38000
3	18500	-19500
4	18500	-1000
5	12500	11500
6	12500	24000
7	12500	36500
8	12500	49000
TOTAL	49000

Payback Period =	4 years + 1000/12500
	4.08 YEARS

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