I am extremely confused on how to solve the payback period for this solution. I have solved up to the accumlated cash inflow part. However, I am confused on how the tutor got this "As a result, the payback term will be 3+ years.

Calculations provide 10.64 months, or about 10 months and 19 days. As a result, the repayment term is three years and ten months. 19 days (approx)

($208,490 accumulated between years 3 and 4, for a total of
109,310= 317,800-208,490 earned in 10.64 months)" 

 

Where did the number "109,310" come from? 

What is the exact numbers that I need to calculate in order to get that number? 

And how does the calculations imply about 10 months and 19 days? 

Also, the goal of the organization is to recoup its investment in five years. 

Year	Cash Inflow	Accumulated Cash inflow
1	46920	46920
2	68166	115086
3	93404	208490
4	123287	331777
5	158573	490350

Answer rating: 100% (QA)

To calculate the payback period we need to determine the length of time it takes for the organization to recoup its initial investment The payback per... View the full answer