Question

10. Cost of machine is * 2,50,000 and its working
life is estimated to be 5 years. Annual cash
inflows are as under :
Years
Annual Cash Inflows
60,000
70,000
60,000
90,000
50,000
Calculate payback period.​

Answer 1

cumulative cah flow is

60000

130000

220000

270000

initial investment of 250000 covered in 3 year and remaining 30000 in 7 month

30000/50000*12 = 7.2

payback period = 3 year 7 month