Poder Inc.is considering a project that has the following cash flow data.What is the project's payback? $\begin{array}{lcccc}
\text { Year } & 0 & 1 & 2 & 3 \
\cline { 2 - 5 } \text { Cash flows } & -\$ 750 & \$ 300 & \$ 325 & \$ 350
\end{array}$
A) 1.91 years
B) 2.12 years
C) 2.36 years
D) 2.59 years
E) 2.85 years

Question

Quizplus · Accepted Answer

$$\begin{array} { l c c c c } 
\text { Year } & 0 & 1 & 2 & 3 \
\hline \text { Cash flowr } & - \$ 750 & \$ 300 & \$ 325 & \$ 350 \
\text { Cumulative CF } & - \$750 & - \$ 450 &  -\$ 125 & \$ 225\
\text { Payback }=2.36 \text { years }& -  &- &-&2.36\
\end{array}$$ Payback = last year before cum CF turns positive + abs.val.last neg.cum CF/CF in payback year.

Poder IncIs Considering a Project That Has the Following Cash Flow