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Next, we will calculate the payback period as a fractional number of years. We know that the payback period will occur during the first year
Next, we will calculate the payback period as a fractional number of years. We know that the payback period will occur during the first year that the cumulative cash flows become positive. So, we need to test each year to determine if the cumulative cash flows for the previous year were negative and the cumulative cash flows for the current year are positive. To do this, we will use a nested function. The IF function will allow us to test this, but the IF function will perform only one logical test. To test both cash flows, we will insert an AND function in the IF function. In the following statement, the result will be zero if the conditions are not met
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