Homework SourseGuerilla Radio Broadcasting has a project available with the
Guerilla Radio Broadcasting has a project available with the following cash flows : Year Cash Flow 0 ?$14,400 1 5,900 2 7,200 3 5,700 4 5,000 What is the payback period?
Solution
Payback Period = last year of negative cumulative cashflow + cumulative cashflow in that year/cashflow in the following year)
= 2 + ( 1300 / 5700 )
= 2 +.23
= 2.23
| Year | 0 | 1 | 2 | 3 | 4 |
| Cashflow(in $) | (14,400) | 5,900 | 7,200 | 5,700 | 5,000 |
| Cumulative Cashflow(in $) | (14,400) | (8,500) | (1,300) | 4,400 | 9,400 |
