Question

What is the payback period on each of the following projects? Given that you wish to...

  1. What is the payback period on each of the following projects?
  2. Given that you wish to use the payback rule with a cutoff period of three years, which projects would you accept?

Cash Flows, $

Project

C0

C1

C2

C3

C4

A

-10,000

+1,000

+1,000

+2,000

+6,000

B

-5,000

0

+1,000

+1,500

+3,000

C

-2,000

+2,000

+4,000

+1,000

+5,000

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