Question: a small cap company is considering a project that has a initial estimated outlay of $150,000. The project is a forecast to produce annual after-

a small cap company is considering a project that has a initial estimated outlay of $150,000. The project is a forecast to produce annual after- tax cashflows of $35,000 for 5 years and $30,000 in year six, the final year.

The cost of common equity to the issuer is 16.8%

The issuer's WACC is 14.3%

The tax rate is 40%

What is the projects payback period?

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