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Payback Period: Example Question

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A project costs $10,000 and is expected to return after-tax cash flows of $3,000 each year for the next 10 years. This project's payback period is:

a. three years.
b. three and one-third years.
c. four years.
d. 10 years.

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Solution Summary

Provides steps necessary to calculate the payback period.

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