PAYBACK PERIOD. Your company is seriously considering investing in a new project opportunity, but cas flow is tight.
Top management is concerned about how long it will take for this new project to pay back the initial investment of $50,000.
You have determined that the project should generate inflows of $30,000, $30, 000, $40,000, $25,000, and $15,000 for the next five years.
Your firm required rate of return is 15%. How long will it take to pay back the initial investment?