Find the Payback period for the following project: Project X $8,870 Initial Outlay $3,620 Year 1...

Question

Question

Find the Payback period for the following project: Project X $8,870 Initial Outlay $3,620 Year 1 $3,430 Year 2 Year 3 $3,660

business finance

Answer 1

Answer #1

Payback period is the period in which inital investment is recovered.

PBP = Year in which least +ve CB + [ CB in that year / CF in Next year ]

= 2 + [ 1820 / 3660 ]

= 2 + 0.50

= 2.50 Years

Answer 2

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