A firm decides to invest in an asset with an initial cost of Php2 million. Over the next five years, the firm then receives positive cash flows of year 1 = Php900,000, year 2 = Php600,000, year 3= Php400,000, year 4 = Php=300,000 that diminish over time. What is the payback period using the formula below

A firm decides to invest in an asset with an initial cost of Php2 million. Over the next five years, the firm then receives positive cash flows of year 1 = Php900,000, year 2 = Php600,000, year 3= Php400,000, year 4 = Php=300,000 that diminish over time. What is the payback period using the formula below

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter13: Capital Budgeting: Estimating Cash Flows And Analyzing Risk

Section: Chapter Questions

Problem 4MC

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