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How do you calculate Payback Period in years ? can you provide the workings to find Payback period in years? 10.20 Payback: Quantum Ltd is
How do you calculate Payback Period in years ? can you provide the workings to find Payback period in years?
10.20 Payback: Quantum Ltd is purchasing machinery at a cost of $4 128 148. The company expects, as a result, cash flows of $846 736, $1 133 275, and $2 282 632 over the next 3 years. What is the payback period? Year 0 1 2 3 CF -$4,128,148 846,736 1,133,275 2,282,632 Cumulative Cash Flow -$4,128,148 -3,281,412 -2,148,137 134,495 PB = Years before cost recovery + (Remaining cost to recover/ Cash flow during the year) = 2.94 years
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