Find the payback period for the following project initial outlay $18,800 year 1 $5,050 year 2...

Question

Question

Find the payback period for the following project

initial outlay $18,800

year 1 $5,050

year 2 $5,890

year 3 $5,120

year 4 $6,660

the answer should be calculated to two decimal places

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).

=3+(2740/6660)

which is equal to

=3.41 years(Approx).

Answer 2

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