Fred Hammond recently invested in a project that has an expected annual cash inflow of $7,000 for 10 years,and an expected payback period of 3.6 years.How much did Fred invest in the project?

Question

Quizplus · Accepted Answer

Using the payback period formula, we can calculate the initial investment:

Initial Investment = Payback Period x Annual Cash Inflow
Initial Investment = 3.6 x $7,000
Initial Investment = $25,200

Therefore, Fred invested $25,200 in the project, making choice C the correct answer.

Fred Hammond Recently Invested in a Project That Has an Expected