Calculate the Payback Period (PP) for a project involving the purchase of new equipment requires an...
Calculate the Payback Period (PP) for a project involving the purchase of new equipment requires an initial investment of $250,000 that will generate $50,000 per year in annual cash savings.
Homework Answers
Answer - payback period = 5 years
Reason - payback period = initial investment ÷ annual cash inflow
Payback period = $250000 ÷ $50000
Payback period = 5 years.
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