Given the following cash flows for project A: 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

To calculate the payback period, we need to add up the positive cash flows until we reach the initial investment of $1,000. 
Year 0: -$1,000
Year 1: +$600 
Year 2: +$400 
Total cash inflows: $1,000 (year 0 + year 1 + year 2)

Since we reached the initial investment in two years, the payback period for Project A is two years.

Given the Following Cash Flows for Project A: C0 =

Given the Following Cash Flows for Project A: C₀ =