A project manager is using the payback method to make the final decision on which project to undertake. The company has a 10% required rate of return and expects a 4% rate of inflation for the following four years
What is the non-discounted payback of a project that has cash flows as shown in the table?
Year Cash Flow
0 -$250,000
1 $50,000
2 $60,000
3 $70,000
4 $80,000
A) 3.875 years
B) 3.625 years
C) 3.750 years
D) 3.500 years
A
Business
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