Calculate the Payback of a 20-Year Project with a Cost

question 117

Multiple Choice

Calculate the payback of a 20-year project with a cost of $400,000 and annual cash flows of $50,000 in years 1-10 and $25,000 in years 11-20. The company's required rate of return is 10%.

• A) 4
• B) 5
• C) 6
• D) 7
• E) 8