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Given the following cash flows, assume that that cost of capital is 8%. Year Cash...

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Accounting

Given the following cash flows, assume that that cost of capital is 8%.

Year Cash flow

0 (-) $225,000

1 $ 30,000

2 $ 75,000

3 $ 75,000

4 $ 50,000

5 $ 50,000

6 $ 50,000

.Compute the payback period:

a) 3.50

b) 3.67

c) 3.75

d) 3.90

e) 4.00

About how many years will it take to grow your 401k balance by 400% assuming 8% annual returns for your portfolio? (Hint: Think CAREFULLY about TVM, and how money grows at (1+i) each year, where i = the rate of return. Thus, a 100% return doubles your money, 200% triples, etc.)

a) 17

b) 18

c) 19

d) 20

e) 21

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