The expected profits from a $52,000 investment are $8000 in Year 1, $12,000 in each of Years
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a. What is the investment’s payback period?
b. If the firm’s required payback period is four years, will it make the investment? Payback Period
Payback period method is a traditional method/ approach of capital budgeting. It is the simple and widely used quantitative method of Investment evaluation. Payback period is typically used to evaluate projects or investments before undergoing them,...
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a Year Cumulative profit 1 8000 2 20000 3 32000 4 4...View the full answer
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