1. Determine Payback Period. It will cost $3,200 to acquire a small ice cream cart. Cart sales are expected to be $1,500 a year for three years. After the three years, the cart is expected to be worthless. What is the payback period?
1.88 years
2.07 years
2.13 years
2.46 years
3.13 years
2. Find Payback Period in years. Baxter's Market is considering opening a new location with an initial cost of $428,700. This location is expected to generate cash flows of $132,400, $161,500, $187,800, and $201,000 in Years 1 to 4. What is the payback period?
1.86 years
2.72 years
1.31 years
2.54 years
2.31 years