Payback period question

Business & Finance
Tutor: None Selected Time limit: 1 Day

Find the payback period for the following project:

                              Project X

Initial Outlay              $8,710

Year 1                        $3,330

Year 2                        $3,010

Year 3                        $3,900

Year 4                        $7,990

The answer should be calculated to two decimal places.

Oct 3rd, 2015

Thank you for the opportunity to help you with your question!

Initial outlay = $8,710

Payback period is the period taken to recover the initial outlay.

Hence payback period = 2 + (2370/3900 ) years

= 2.61 years

Explanation

In 2 years, the project reaps $6340. Balance remaining to recover initial capital = 2370.

Please let me know if you need any clarification. I'm always happy to answer your questions.
Sep 22nd, 2015

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Oct 3rd, 2015
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Oct 3rd, 2015
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