Compute the payback statistic for Project A if the appropriate cost of capital is 7 percent...

Question

Question

Compute the payback statistic for Project A if the appropriate cost of capital is 7 percent and the maximum allowable payback

Answer 1

Answer #1

Payback period=Last period with a negative cumulative cash flow+(Absolute value of cumulative cash flows at that period/Cash flow after that period).

=2+(740/900)

=2.82 years(Approx).

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Answer 2

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