The calculation of the payback period for an investment when net cash flow is even (equal) is:

Name: The calculation of the payback period for an investment when net cash flow is even (equal) is:
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Question

Quizplus · Accepted Answer

When the net cash flow is even, the payback period can be calculated by dividing the cost of investment by the annual net cash flow. This gives the number of years it will take for the net cash inflows to equal the initial cost of the investment. Therefore, option A is the correct choice.

The Calculation of the Payback Period for an Investment When