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2 August, 02:52

An investment proposal with an initial investment of $100,000 generates annual net cash inflow of $20,000 for a period of 10 years. The project has a net present value of $10,000. What is this investment proposal's payback period?

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  1. 2 August, 03:04
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    5 years

    Explanation:

    Initital investment $100,000

    Cash inflows 1-5 (20,000*5) ($100,000)

    The payback period for this investment project is 5 years.

    or

    100,000/20,000=5 years
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