A project has the following cash flows. Cash flows are paid at year-end. Year CF 2017...

Question

Question

A project has the following cash flows. Cash flows are paid at year-end.

Year CF

2017 -$200

2018 +$80

2019 +$80

2020 +$80

2021 +$80

What is the payback period if the opportunity cost of capital (OCC) is 11%?

3,5,4, or 2 years?

Answer 1

Answer #1

Payback period = Cost / CF per year

Payback period = $200/$80

Payback period = 2.5 years

Answer 2

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