Scribd Logo
Upload

Welcome to Scribd!

  • Payback Period

    Uploaded by

    eve
    7 views1 page
    The document provides cash flow information for two projects over 5 years. Project 1 has an initial investment of -$1000 and positive cash flows of $500, $400, $200, $100, and $100 in subsequent years. The payback period for Project 1 is calculated to be 2.5 years. Project 2 also has an initial investment of -$1000 and positive cash flows of $100, $300, $500, $600, and $700 in subsequent years. The payback period for Project 2 is calculated to be 3.17 years.

    Original Description:

    Copyright

    © © All Rights Reserved

    Available Formats

    PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    Report this Document
    The document provides cash flow information for two projects over 5 years. Project 1 has an initial investment of -$1000 and positive cash flows of $500, $400, $200, $100, and $100 in subsequent years. The payback period for Project 1 is calculated to be 2.5 years. Project 2 also has an initial investment of -$1000 and positive cash flows of $100, $300, $500, $600, and $700 in subsequent years. The payback period for Project 2 is calculated to be 3.17 years.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    7 views1 page

    Payback Period

    Uploaded by

    eve
    The document provides cash flow information for two projects over 5 years. Project 1 has an initial investment of -$1000 and positive cash flows of $500, $400, $200, $100, and $100 in subsequent years. The payback period for Project 1 is calculated to be 2.5 years. Project 2 also has an initial investment of -$1000 and positive cash flows of $100, $300, $500, $600, and $700 in subsequent years. The payback period for Project 2 is calculated to be 3.17 years.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    of 1

    GIT 1605

    PAYBACK PERIOD

    Assume the following cash flow for 2 projects. Assuming that the cash flows are
    occurring at the end of the year. Find the payback period for both these projects.

    YEAR PROJECT 1 PROJECT 2

    0 -1000 -1000

    1 500 100

    2 400 300

    3 200 500

    4 100 600

    5 100 700

    PROJECT 1

    0 1 2 3 4 5

    -1000 500 400 200 100 100


    900 1100 1200 1300

    100
    Payback Period: 2 + 200
    = 2.5 years

    PROJECT 2

    0 1 2 3 4 5

    -1000 100 300 500 600 700


    400 900 1500 2200

    100
    Payback Period: 3 + 600
    = 3.17 years

    You might also like