Payback period

QUESTION

project K costs $52125 its expected net cash inflows are $12000 per year 8 year and its WACC is 12%
I guess payback period is to be calculated. in calculation of payback period present value of money is not considered.The Pay back period is the length of time required for an investment to pay itself out. It is computed asPBP = I/EWhen the projected net cash flows (E) are uniform ornPBP = I / S Ett=1When the projected net

h flows are non-uniform.Where I = the initial investment.E = the projected net cash flows per year from the investment.PBP = Pay Back Period expressed in number of years. so, payback period = 52125/12000 = 4.34375 yrs.

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