Garner Inc. is considering a project that has the following cash flow data. What is the project's payback?
$\begin{array} { c c c c c }
\text { Year } & 0 & 1 & 2 & 3 \
\text { Canh tlows } & - \$ 350 & 200 & 200& 200
\end{array}$

Question

Garner Inc. is considering a project that has the following cash flow data. What is the project's payback?
 $\begin{array} { c c c c c } 
\text { Year } & 0 & 1 & 2 & 3 \
\text { Canh tlows } & - \$ 350 & 200 & 200& 200
\end{array}$

Quizplus · Accepted Answer

$\begin{array} { l c c c c } 
\text { Year } & 0 & 1 & 2 & 3 \
 \text { Cash flows } & - \$ 350 & \$ 200 & \$ 200 & \$ 200 \
\text { Curmlative CF } & - \$ 350 & - \$ 150 & \$ 50 & \$ 250\
\text { Payback }=1.75 \text { years } & - & - & 1.75 & -
\end{array}$ 
Payback = last year before cum CF turns positive + abs. val. last neg. cum CF/CF in payback year.

Garner Inc Year 0123 Canh tlows −$350200200200\begin{array} { c c c c c } \text { Year } & 0 & 1 & 2 & 3 \\\text { Canh tlows } & - \$ 350 & 200 & 200& 200\end{array} Year Canh tlows ​0−$350​1200​2200​3200​

Garner Inc $\begin{array} { c c c c c } \text { Year } & 0 & 1 & 2 & 3 \\\text { Canh tlows } & - \$ 350 & 200 & 200& 200\end{array}$