What is the payback period for the cash flows?
consider the following cash flows:
The payback period is the time needed for cash flows from a project to cover the initial cost of the project. The lower the payback period, the more attractive is the project into consideration.
Answer and Explanation:
Using the initial cash flows as a basis, we first need to calculate the cumulative cash flow until it turns positive.
- Cumulative Cash Flow for Year 1...
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Learn more about this topic:
from Introduction to Management: Help and ReviewChapter 16 / Lesson 12