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Next Page Page 1 of 3 Question 1 (1 point) What is the simple (undiscounted) payback...

Question

Next Page Page 1 of 3 Question 1 (1 point) What is the simple (undiscounted) payback...

Next Page Page 1 of 3 Question 1 (1 point) What is the simple (undiscounted) payback period in years for a $100,000 project w
Next Page Page 1 of 3 Question 1 (1 point) What is the simple (undiscounted) payback period in years for a $100,000 project with expected cash flows of $19,000 each of the first two years and $9,000 for each year after. Your Answer: Answer

Answers

Payback period is the time within which cost of project is recovered back.
Year Cash flow Cumulative cash flow
0 $       -1,00,000 $ -1,00,000
1                 19,000         -81,000
2                 19,000         -62,000
3                   9,000         -53,000
4                   9,000         -44,000
5                   9,000         -35,000
6                   9,000         -26,000
7                   9,000         -17,000
8                   9,000           -8,000
9                   9,000             1,000
Payback period = 8+(8000/9000)
= 8.89 Years


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