Question:

A project requires an initial investment of $700,000 and will generate cash savings of $95,000 each year for the next five years. What is the payback period? Year 0 1 2 3 Cash Flow (RM700,000 RM95,000 RM95,000 RM95,000 Cumulative (RM700,000) (RM125,000) (RM50,000) RM25,000