Payback: What is the payback period for this project?

Question

Quizplus · Accepted Answer

The payback period for the project is calculated as follows: 
Initial Investment / Annual Cash Inflows = Payback Period 
$700,000 / $233,333.33 = 3 years 
Since option B has a payback period of 3.0 years, it is the best choice. Option A has a shorter payback period, but it is not a feasible option as it results in a negative net present value. Options C and D have longer payback periods, which may be riskier for the company.

Payback: What Is the Payback Period for This Project