Question

Consider the following project:

Year	0	1	2	3	4
Project A	-20.00	8.00	7.00	6.00	7.00

Find the payback for this project. (ROUND TO TWO DECIMAL PLACES)

Answer 1

As per the details given inn the information-

Year	Cashflow	Cummulative CF
0	-20.00	-20.00
1	8.00	8.00
2	7.00	15.00
3	6.00	21.00
4	7.00	28.00

Payback period = 2 years + {(20 -15 )/ 6 }
Payback period = 2.83 years

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