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Question
Eagle Company is considering the purchase of an asset for $100,000. It is expected to produce the following net cash flows. The cash flows occur evenly throughout each year. Compute the payback period for this investment. (Round to two decimal places.)
| Annual Net Cash Flows |
||
| Year 1 | $40,000 | |
| Year 2 | $40,000 | |
| Year 3 | $35,000 | |
| Year 4 | $35,000 | |
| Year 5 | $30,000 |
A. 2.85 years.
B. 2.57 years.
C. 3.00 years.
D. 2.50 years.
E. 3.62 years.
Answer
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Related questions
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