The payback period for a project,requiring an initial outlay of $10,000 and producing ten uniform annual cash inflows of $1,500,is
A)six years.
B)six years and eight months.
C)six years and six months.
D)seven years.

Question

Quizplus · Accepted Answer

Payback period = Initial investment / Annual Cash Flows
Payback period = $10,000 / $1,500 = 6.67 years or 6 years and 8 months. 
Therefore, the best choice is B.

The Payback Period for a Project,requiring an Initial Outlay of $10,000