If the cash flows of a project are received evenly over the life of the project, the formula for the calculating the payback period is

Question

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The formula for calculating the payback period when the cash flows are even over the life of the project is simply the original investment divided by the annual cash flow. This represents how many years it will take to recoup the initial investment based on the amount of cash flow generated each year.

If the Cash Flows of a Project Are Received Evenly