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    Calculate the payback period for a set of cash flows

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    What is the payback period for the following set of cash flows?

    Year 0 Cash Flow is -$2,500;
    year 1 cash flow is $300;
    year 2 cash flow is $1500;
    year 3 cash flow is $900;
    year 4 cash flow is $300

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    Solution Preview

    In year 0 the outflow is = $2,500
    In year 1 the inflow is = $300, balance ...

    Solution Summary

    The solution shows the outflows and inflows for each year, and then explains the length of the payback period.