Payback Period

Each of the following scenarios is independent. Assume that all cash flows are after$-$tax cash flows.

Colby Hepworth has just invested $$475,000$ in a book and video store. She expects to receive a cash income of $$120,000$ per year from the investment.

Kylie Sorensen has just invested $$1,400,000$ in a new biomedical technology. She expects to receive the following cash flows over the next $5$ years: $$350,000,$ $$490,000,$ $$700,000,$ $$420,000,$ and $$280,000.$

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 $$1,350,000$ in a project that pays him an even amount per year for $5$ years. The payback period is $2\mathrm{.}5$ years.

Required:

$1.$ What is the payback period for Colby? Round your answer to two decimal places.

$2.$ What is the payback period for Kylie? Round your answer to one decimal place.

$3.$ How much did Carsen invest in the project?

$4.$ How much cash does Rahn receive each year?