Question

A project cost Rs 50000 and yields an annual cash inflow of Rs 10000 for 7 years calculate the pay back periods

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Answer 1

Answer:

the Answer is 6000000 note

Answer 2

Given:    

A project has cost Rs.50,000

Yields a cash flow of inflow of Rs.10,000 for 7 years

To find:

Here, we need calculate the pay back periods.

Solution:

• In project we have invested Rs.50,000
• In this project we are yielding the income of Rs.10,000 for 7 years.

To find the payback period = $\frac{Initial investment}{Cash flow for years}$

      Payback period =  $\frac{50,000}{10,000}$

     Payback period = 5 years

Here, we have income of 10,000 for 7 years.

But, we have invested the amount of Rs.50,000

Actually, we have earned a income of Rs.70,000.

Here, we can divide the values of Actual income / profit

  ∴=  $\frac{50,000}{20,000}$    

Here, the profit value is 2.5 years.