Answer:
The cash payback period is 6.3 years.
Explanation:
The cash payback period can be calculated using the following formula:
Cash payback period = Estimated project cost / Estimated annual net cash flows ....................... (1)
Where;
Estimated project cost = $201,600
Estimated annual net cash flows = $32,000
Substituting the values into equation (1), we have:
Cash payback period = $201,600 / $32,000
Cash payback period = 6.3
Therefore, the cash payback period is 6.3 years.
