Question 2 (1 point) Find the Payback period for the following project: Project Y Initial Outlay...

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Question 2 (1 point) Find the Payback period for the following project: Project Y Initial Outlay $18,100 $5,490 Year 1 Year 2

Answer 1

Answer #1

Year 0:-18100
Year 1:5490
Year 2:5220
Year 3:5050
Year 4:7280

Cumulative net cash flows:
Year 0:-18100
Year 1:5490-18100=-12610
Year 2:5220-12610=-7390
Year 3:5050-7390=-2340
Year 4:7280-2340=4940

Payback period=3+2340/7280=3.32142857 or 3.32 years (Rounded to two decimal places)

Answer 2

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