If the cash flows for project A are C₀ = −1,000; C₁ = +600; C₂ = +400; and C₃ = +1,500, calculate the payback period. A)One year B)Two years C)Three years D)Cannot be determined

Question

Quizplus · Accepted Answer

The payback period is the time it takes for cumulative cash flows to equal the initial investment. After year 1, cumulative cash flow is -400; after year 2, it is 0. Thus, the payback period is two years.

If the Cash Flows for Project a Are C0 =

If the Cash Flows for Project a Are C₀ =