The calculation of the payback perlod for an investment when

The calculation of the payback perlod for an investment when net cash flow is even (equal) is Multiple Choice Cost of investment/Annual net cash flow Total net cash flow/Annual net cash flow Total net cash flow/Cost of investment Annual net cash flow/Cost of investment Cost of investment/Total net cash flow

Solution

When cash flows are equal, payback period is calculated as per following formula

Payback period

= Cost of Investment / Annual net cash flow

This is because each annual payment will contribute towards the payback period and so the initial investment will be recovered in number of years it takes the annual cash flows to reach the amount of initial investment

So, as per above discussion, option A is the correct option