Susmel Inc. is considering a project that has the following cash flow data. What is the project's payback
1 answer:
Answer: 2.5 years
Explanation:
The payback period of a project as the term implies, is the amount of time it takes for a project's cashflows to pay off its original outlay.
The formula is;
= Year before payback + Amount remaining/ Cashflow in year of Payback
Year 1 + 2 = 150 + 200 = $350
Amount remaining = 500 - 350 = $150
Payback period = 2 + 150/300
= 2.5 years
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