Payback: What is the payback period for this project?

Name: Payback: What is the payback period for this project?
Brand: Quizplus
Rating: 4.8 (58 reviews)

Question

Quizplus · Accepted Answer

The payback period for this project is calculated as the initial investment divided by the annual cash inflows. Therefore, Payback period = $10,000 / $3,450 = 2.8986 (rounded to 2.9 years). Since the company requires a payback period of less than 3 years, the best choice is B, which has a payback period of 2.9 years.

Payback: What Is the Payback Period for This Project