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Problem:

Consider the following four-year project. The initial after-tax outlay is $550,000. The future after-tax cash inflows for years 1, 2, 3 and 4 are: $175,000, $250,000, $280,000 and $200,000, respectively.

Required:

Question: What is the payback period without discounting cash flows?

3.0 years
2.44 years
4.0 years
3.5 years

Note: Provide support for your underlying principle.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91173326

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