Calculate the Payback Period (PP)for the Cash Flows Provided in the Table

question 71

Multiple Choice

Calculate the payback period (PP) for the cash flows provided in the table below.Note: The negative cash flow for year 0 is the initial investment for the project.

• A)3 years
• B)2.50 years
• C)1.75 years
• D)1 year

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Definitions:

Financial Capital

The funds that corporations and individuals use to invest in and finance new business ventures and operations.

Real Capital

Physical assets that are used in the production of goods and services, such as machinery, buildings, and equipment.

Vicious Circle

A complex sequence of negative events or conditions that reinforce each other, leading to a deteriorating situation or a series of worsening cycles.

Infrastructure Problem

Issues or challenges related to the basic facilities, services, and installations needed for the functioning of a community or society, like roads, bridges, and power supplies.