Question

Asked Dec 1, 2019

Compute the payback statistic for Project A if the appropriate cost of capital is 7 percent and the maximum allowable payback period is four years. **(Round your answer to 2 decimal places.)**

Project A | ||||||

Time: | 0 | 1 | 2 | 3 | 4 | 5 |

Cash flow: | –$2,600 | $990 | $960 | $840 | $620 | $420 |

Step 1

**Calculation of Payback Period:**

The payback period is **2.77 years**.

**Excel Spreadsheet:**

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