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Sagot :
The investment's payback period is 2.92 years with net cash flows of $10,600 annually for four years.
What are cash flows ?
The net amount of cash and cash equivalents entering and leaving a business is known as cash flow. Money received and spent are used to illustrate inflows and outflows respectively.
Ability to generate positive cash flows, or more specifically, potential to maximize long-term free cash flow (FCF), is ultimately what determines a company's ability to create value for shareholders. A company's free cash flow (FCF) is the cash it brings in from normal business operations after deducting any money required for capital expenditures (CapEx).
The money a company receives and spends is referred to as its cash flow. Sales revenue is received by businesses, and it is used for overhead. They could also profit from investments, royalties, license agreements, and interest payments. Even worse, they might sell products on credit with the intention of collecting the money due later.
To solve the question :
Payback Period Initial Investment / Annual Cash flow = Payback Period
$31,000 / $10,600 = 2.92 years
To know more about, cash flows, visit :
https://brainly.com/question/27994727
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