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Problem 8-8 Payback (LO4) The following are the cash flows of two projects: Year Project A Project B 310 140 140 140 140 -$ 310 210 210 210 What is the payback period of each project? (Round your answers to 1 decimal place.) Project Payback Period years years

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Answer #1

Answer:

Payback Period = Initial Investment / Annual Cash Inflow

Project A:
Payback Period = 310 / 140
Payback Period = 2.2 years

Project B:
Payback Period = 310 / 210
Payback Period = 1.5 years

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