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Each of the following scenarios is independent. Assume that all cash flows are after-tax cash flows. Colby Hepworth has just invested $600,000 in a book
Each of the following scenarios is independent. Assume that all cash flows are after-tax cash flows.
- Colby Hepworth has just invested $600,000 in a book and video store. She expects to receive a cash income of $120,000 per year from the investment.
- Kylie Sorensen has just invested $1,580,000 in a new biomedical technology. She expects to receive the following cash flows over the next 5 years: $350,000, $490,000, $790,000, $440,000, and $350,000.
- Carsen Nabors invested in a project that has a payback period of 4 years. The project brings in $960,000 per year.
- Rahn Booth invested $1,450,000 in a project that pays him an even amount per year for 5 years. The payback period is 2.5 years.
Required:
1. What is the payback period for Colby? Round your answer to two decimal places. fill in the blank 1 years
2. What is the payback period for Kylie? Round your answer to one decimal place. fill in the blank 2 years
3. How much did Carsen invest in the project? $fill in the blank 3
4. How much cash does Rahn receive each year? $fill in the blank 4 per year
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