LMN Corporation is considering an investment that will cost Rs 100000 and have a useful life of 4 years. During the first 2 years, the net incremental after-tax cash flows are Rs 25000 per year and for the last two years they are Rs 50000 per year. What is the payback period for this investment? a. 0.25 years b. 3 years c. 4 years d. 5 years

Managerial Accounting: The Cornerstone of Business Decision-Making
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Chapter12: Capital Investment Decisions
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Problem 21BEA
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LMN Corporation is considering an investment that will cost Rs 100000 and have a useful life of 4 years. During the first 2 years, the net incremental after-tax cash flows are Rs 25000 per year and for the last two years they are Rs 50000 per year. What is the payback period for this investment?
a.
0.25 years
b.
3 years
c.
4 years
d.
5 years
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