Respuesta :
Payback period for Project A =3 years +(199,754-129,800)/401,000=3.17 YEARS
The duration needed to recoup an investment's cost is referred to as the payback period. Simply described, it is the period of time it takes for an investment to break even. The payback period is significant because individuals and businesses invest money primarily in order to be reimbursed. In principle, an investment gets more alluring the quicker its payback is. Anyone can benefit from calculating the payback period by dividing the initial investment by the typical cash flows.
- The payback period is the amount of time needed for an investor to break even or to recoup the cost of their investment.
- Longer payback periods are less enticing than shorter ones in terms of investment appeal.
- By dividing the investment's total cost by its yearly cash flow, the payback period is determined.
- To decide whether to proceed with an investment, account and fund managers look at the payback period.
- The payback period's failure to take the time value of money into account is one of its drawbacks.
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