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Homework answers / question archive / Fred Hammond recently invested in a project that has an expected annual cash inflow of $7,000 for 10 years, and an expected payback period of 3
Fred Hammond recently invested in a project that has an expected annual cash inflow of $7,000 for 10 years, and an expected payback period of 3.6 years. How much did Fred invest in the project?
A. $19,444
Answer:
C . $ 25,200
Step-by-Step explanation
Payback period = 3.6 year.
Annual cash inflow = $7,000.
The total amount that would be covered during the payback period is the amount invested by Fred.
Fred investment amount = $7,000 + $7,000 + $7,000 + $4,200 = $25,200.
