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To determine: The payback period for the project
Introduction:
The payback period is one of the capital budgeting techniques, which refers a period needed to get back the actual investment in a project. Payback period is the period needed to generate the cash flows for an investment that are adequate to recover the primary expenses.
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Answer to Problem 8.2C
The payback period for the initial investment of $3,550 is 3.55.
Explanation of Solution
Given information:
The initial investment is $3,550. The
Note: Here, the cash flows are an
Formula to calculate the payback period:
Compute the payback period if the initial investment is $3,550:
Hence, the payback period for the initial investment of $3,550 is 3.55 years.
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Chapter 8 Solutions
ESSENTIAL OF CORP FINANCE W/CONNECT
- Essentials Of InvestmentsFinanceISBN:9781260013924Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.Publisher:Mcgraw-hill Education,
- Foundations Of FinanceFinanceISBN:9780134897264Author:KEOWN, Arthur J., Martin, John D., PETTY, J. WilliamPublisher:Pearson,Fundamentals of Financial Management (MindTap Cou...FinanceISBN:9781337395250Author:Eugene F. Brigham, Joel F. HoustonPublisher:Cengage LearningCorporate Finance (The Mcgraw-hill/Irwin Series i...FinanceISBN:9780077861759Author:Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan ProfessorPublisher:McGraw-Hill Education
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