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Zeta Gaming Company has an opportunity to purchase video game phone app that will cost $150,000. Zeta expects the demand for the app to start
Zeta Gaming Company has an opportunity to purchase video game phone app that will cost $150,000. Zeta expects the demand for the app to start strong but to diminish as people tire of the game. The expected cash inflows are as follows: Year 1 Year 2 Year 3 Year 4 Year 5 $60,000 $50,000 $40,000 $30,000 $20,000 If Zeta uses the average approach the payback period for this investment is
a. 2 years
b. 3.75 years
c. 4.25 years
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