Question

Porter co. is analyzing two projects for the future. assume that only one project can be selected. project x project y cost of machine $68,000 $60,000 net cash flow: year 1 24,000 4,000 year 2 24,000 26,000 year 3 24,000 26,000 year 4 0 20,000 the payback period in years for project x is:

Answer 1

The answer is that "the payback period for project X is 2.75 years".

we can calculate this by dividing cost of machine by the amount of net cash flow;
Payback period for project X = 77,000/28,000
= 77/28
= 2.75 years