Creative Solutions, Inc., has just invested $4,798,500 in new equipment. The firm uses a payback period criteria of not accepting any project that takes more than four years to recover its costs. Management anticipates cash flows of $671,300, $940,800, $754,800, $1,215,600, $2,410,100, and $1,783,100 over the next six years. (Round answer to 2 decimal places, e.g. 15.25.)
What is the payback period of this investment?
Payback period is years.
Should Creative Solutions, Inc. go ahead with this project?
The firm should not have been accepted should be accepted the project.