If a proposed expenditure of $80,000 for a fixed asset with a 4-year life has an annual expected net cash flow and net income of

Question

3 years ago

7

$32,000 and $12,000, respectively, the cash payback period is 2.5 years.
a. true
b. false

1 answer:

Whitepunk [10] · Answer 1 · 2022-06-05T22:56:23+03:00

6 0

Answer: a. true

Explanation:

Cash payback period shows the amount of time it will take for cash inflows from an investment to pay off the investment.

Cash payback period = Investment/ Cash inflow

= 80,000/32,000

= 2.5 years

<em>Statement is proven true. </em>