The following are the cash flows of two projects:
What is the payback period of each project?
Some values below may show as rounded for display purposes, though unrounded numbers should be used for the actual calculations.
Project A has a payback period of $220 / $100 = 2.2 years
Project B has a payback period of $220 / $120 = 1.8 years
| Year | Project A | Project B | ||||
| 0 | −$ | 220 | −$ | 220 | ||
| 1 | 100 | 120 | ||||
| 2 | 100 | 120 | ||||
| 3 | 100 | 120 | ||||
| 4 | 100 | |||||
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What is the payback period of each project?
Some values below may show as rounded for display purposes, though unrounded numbers should be used for the actual calculations.
Project A has a payback period of $220 / $100 = 2.2 years
Project B has a payback period of $220 / $120 = 1.8 years
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