Question: A project manager is using the payback method to make the final decision on which project to undertake. What is the undiscounted payback period of
A project manager is using the payback method to make the final decision on which project to undertake. What is the undiscounted payback period of a project that has cash flows as shown in the table? What is the rate of return?
| Year | Cash Outflow | Cash Inflow |
| 0 | $400,000 | - |
| 1 |
| $75,000 |
| 2 |
| $100,000 |
| 3 |
| $150,000 |
| 4 |
| $150,000 |
| 5 |
| $750,000 |
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