Practice Question
If a project has an initial investment of $150,000 and annual cash inflows of $50,000 for 5 years, what is the payback period?
Answer +
C
Step-by-step solutions +
Payback Period = Initial Investment / Annual Cash Flow
= $150,000 / $50,000
= 3 years
Therefore, the payback period is 3 years.
= $150,000 / $50,000
= 3 years
Therefore, the payback period is 3 years.