You are given the following information for a potential capital budgeting project: The initial investment is $500.

Question:

You are given the following information for a potential project: The initial investment is $500. The life of the project is 3 years with the following cash flows during years 1, 2 and 3, respectively: $350, $100 and $250. The WACC is 12%. What is the for this project?
A. Between the 1st and 2nd year
B. Between the 2nd and 3rd year
C. 4 years
D. 2 years
Capital Budgeting
Capital budgeting is a practice or method of analyzing investment decisions in capital expenditure, which is incurred at a point of time but benefits are yielded in future usually after one year or more, and incurred to obtain or improve the... Payback Period
Payback period method is a traditional method/ approach of capital budgeting. It is the simple and widely used quantitative method of Investment evaluation. Payback period is typically used to evaluate projects or investments before undergoing them,...