Estimating payback period of investment


Creative Solutions, Inc., has just invested $4,992,832 on equipment. The firm uses payback period criteria of not accepting any project that takes more than four years to recover its costs. The company anticipates cash flows of $690,846, $761,985, $1,054,869, $1,653,694, $1,972,952, and $2,301,260 over the next six years. (Round answer to 2 decimal places, e.g. 15.25.)

What is the payback period of this investment?

Should Creative Solutions, Inc. go ahead with this project?

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Finance Basics: Estimating payback period of investment
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