- Capital Budgeting
- Capital Budgeting Ratios
- Payback Period and Discounted Payback Period
Calculating the cash payback period
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If an asset cost 16,000 has an expected useful life of 8 yrs is an expected to have a $2000 salvage value and generates net income cash inflows of $2000 a year, the cash payback period is
a. 8 yrs
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b. 7 yrs
c 6 yrs
d. 5 yrs
We see that net cash inflow is $2000 a year. In seven years $14000 will be ...
Solution describes the steps to calculate the payback period in the given case.