Question

What is the payback (in years) of a project with the following cash flows? Year 0 1 2 3 Cash Flow -$100 40 40 80 Group of answer choices 2.25 2.50 1.25 Cannot be determined without knowing either the IRR or WACC. CHEGG

Answer 1

Answer:

2.25 years

Explanation:

Payback calculates the amount of time it takes to recover the amount invested in a project from it cumulative cash flows

Please check the attached image for a table showing how the payback period was calculated