Assignment:
The Seattle Corporation has been presented with an investment opportunity which will yield cash flows of $30,000 per year in Years 1 through 4, $35,000 per year in Years 5 through 9, and $40,000 in Year 10. This investment will cost the firm $150,000 today, and the firm's cost of capital is 10 percent. Assume cash flows occur evenly during the year, 1/365th each day. What is the payback period for this investment?
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a. |
5.23 years
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b. |
4.86 years
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c. |
4.00 years
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d. |
6.12 years
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e. |
4.35 years
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