If there are non-uniform cash flows (cash flows that differ from year-to-year), payback period is calculated by dividing net initial investment by uniform increase in annual future cash flows.

Name: If there are non-uniform cash flows (cash flows that differ from year-to-year), payback period is calculated by dividing net initial investment by uniform increase in annual future cash flows.
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Question

Quizplus · Accepted Answer

If there are varying cash flows, cumulative cash flows must be tracked to determine the payback period.

If There Are Non-Uniform Cash Flows (Cash Flows That Differ