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26 November, 07:33

Worthington Inc. is considering a project that has the following cash flow data. What is the project's payback period?

Year 0 1 2 3

Cash flows - $500 $150 $200 $300

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  1. 26 November, 08:45
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    The project's payback period is 2.5 years.

    Explanation:

    year cash flow comulative cash flow

    0 - 500 - 500

    1 150 - 350

    2 200 - 150

    3 300

    payback period = 2 years + 150-300

    = 2.5 years

    Therefore, The project's payback period is 2.5 years.
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