This preview shows page 1. Sign up to view the full content.
Unformatted text preview: The payback period for any project the the time in which we could recover the project cost. In case of project B for first 4 years there is no cash flow and hence no recovery but in fifth year there is a cash inflow of 200000. It is assumed that this 200000 occurs proportionately for the whole year and hence 100000 is recovered by year end. 100000/200000 = .5 years.Thus the payback period for this project becomes 4 years + . 5 year = 4.5 years....
View
Full
Document
 Spring '11
 xyz

Click to edit the document details