Question: A company is evaluating an investment proposal using the payback method. Cash inflows are expected to be $16000 in year 1, $12000 in year 2

A company is evaluating an investment proposal using the payback method. Cash inflows are expected to be $16000 in year 1, $12000 in year 2 and $8 000 in year 3. The initial investment required is $32000. Calculate the payback period.

2 years

2.25 years

2.5 years

2.6 years

3 years

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