What is the payback period for an investment of $10000 with net revenues as follows: year 1: $5000, Year 2: $3000, Year 3: $2000, Year 4: $5000, Year 5: $3000. A. 2 years B. 3 years C. 4 years D. 5 years
What is the payback period for an investment of $10000 with net revenues as follows: year 1: $5000, Year 2: $3000, Year 3: $2000, Year 4: $5000, Year 5: $3000. A. 2 years B. 3 years C. 4 years D. 5 years
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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What is the payback period for an investment of $10000 with net revenues as follows: year 1: $5000, Year 2: $3000, Year 3: $2000, Year 4: $5000, Year 5: $3000.
A. 2 years
B. 3 years
C. 4 years
D. 5 years
Expert Solution
Step 1
Payback period: Payback period is the length of time in which an investment reaches its break-even point. In other words, Payback period means the time required to recover the funds expended in an investment, or to reach the break-even point.
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