Given the following information, calculate the payback period. Initial outflow is $20,000, cash inflows for the next six years are $8,000 per year.

Question

Quizplus · Accepted Answer

The payback period is the number of years it takes to recover the initial investment. In this case, the initial investment is $20,000 and the annual cash inflows are $8,000. So, the payback period is 20,000 / 8,000 = 2.5 years.

Given the Following Information, Calculate the Payback Period