Multiple Choice
Seattle Inc. identifies 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. The initial cash outflow is $150,000, and the firm's required rate of return is 10 percent. Assume cash flows occur evenly during the year, 1/365th each day. What is the payback period for this investment? (Round off the answer to two decimal places.)
A) 5.23 years
B) 4.86 years
C) 4.00 years
D) 6.12 years
E) 4.35 years
Correct Answer:
Verified
Correct Answer:
Verified
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