FOUND.OF FINANCIAL MANAGEMENT-ACCESS
17th Edition
ISBN: 9781260519969
Author: BLOCK
Publisher: MCG
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Question
Chapter 12, Problem 7P
Summary Introduction
To calculate: The selection of the investment using pay-back period.
Introduction:
Pay-back period (PBP):
It is one of the methods of capital budgeting that helps evaluate the time period in which the amount of initial investment is recovered. The formula for the calculation of the PBP is shown below:
Where,
Year = The year in which cumulative cash flow is near and less than the initial investment.
Initial investment = The amount of the investment.
Cumulative cash flow = The cumulative cash flow which is near and less than the initial investment.
Cash flow = The cash flow of the next year from the “Year� used for the calculation.
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Chapter 12 Solutions
FOUND.OF FINANCIAL MANAGEMENT-ACCESS
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