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....
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- Spring '11
- Net Present Value, Internal rate of return, $564, 4.5 years, $18268