The formula used to calculate the payback period for qualifying projects is ________.
A) Ct = ∑(Cd + Cᵢ)
B) Ct = PP/Bₐ
C) PP = ∑(Cd + Cᵢ)
D) PP = Ct/Bₐ
E) Bₐ = Cd + Cᵢ

Question

Quizplus · Accepted Answer

The payback period (PP) is the amount of time it takes for an investment to generate enough cash flow to cover its initial cost. The formula used to calculate the payback period is PP = Ct/Bₐ, where Ct is the cumulative cash flow and Bₐ is the annual cash flow.

The Formula Used to Calculate the Payback Period for Qualifying