Consider an Investment with an Initial Cost of $20,000 and Is

Multiple Choice

Consider an investment with an initial cost of $20,000 and is that expected to last for 5 years.The expected cash flows in years 1 and 2 are $5,000, in years 3 and 4 are $5,500 and in year 5 is $1,000.The total cash inflow is expected to be $22,000 or an average of $4,400 per year.Compute the payback period in years.

A) 3.18 years
B) 3.82 years
C) 4.00 years
D) 4.55 years
E) None of the above