For the cash flows and Initial Outlay shown in the table to the right, calculate the payback period.(Remember, you're to calculate the period, not the payback date.)

Year Project X Cumulative CF Cumulative net CF Opening& closing cumulative CF

0 ($10,390) $10,390

1 $4,348 $4,348 $14,738

2 $7,532 $11,880 $22,270

3 $2,193 $14,073 $24,463

4 $1,894 $15,967 $26,357

Becuase year 0 is a negative I am unsure of how to get the opening and closing of the cumulative cash flows.

Answer rating: 100% (QA)

Youre right the initial negative cash flow in year 0 requires special treatment when calculating the payback period Heres how to find the payback peri... View the full answer