Payback period.  What are the payback periods of projects E and​ F? Assume all the cash flow is evenly spread throughout the year. If the cutoff period is three​ years, which​ project(s) do you​ accept?     Cash Flow E F     Cost ​ $40,000   ​$95,000

Essentials Of Investments
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ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
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Chapter1: Investments: Background And Issues
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Payback
period.
 What are the payback periods of projects E and​ F? Assume all the cash flow is evenly spread throughout the year. If the cutoff period is three​ years, which​ project(s) do you​ accept?
 
  Cash Flow
E
F
 
  Cost
​ $40,000
 
​$95,000
 
  Cash flow year 1
​$10,000
 
​$19,000
 
  Cash flow year 2
​$10,000
 
​$9,500
 
  Cash flow year 3
​$10,000
 
​$38,000
 
  Cash flow year 4
​$10,000
 
​$28,500
 
  Cash flow year 5
​$10,000
 
​$0
 
  Cash flow year 6
​$10,000
 
​$0
 
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