The management team of Relax Spa is considering investing in the Energize & Herbal Bar. The bar will cost $100,000, have a useful life of 5 years, after which it will have no salvage value. The expected cash inflows are as below:

Year          Cash Inflows 

1                    $40,000  

2                     $50,000 

3                      $40,000

4                       $30,000 

 5                       $25,000

What is the payback period for the project?

Answer rating: 100% (QA)

Year Cash Inflows Cumulative Cash Inflows 1 40000 40000 2 50000 90000 ... View the full answer