The payback period for project A is closest to ________
Consider the following two projects:
Project
Year 0
Cash Flow Year 1
Cash Flow Year 2
Cash Flow Year 3
Cash Flow Year 4
Cash Flow Discount
Rate
A -100 40 50 80 N/A 0.12
B -73 30 30 30 30 0.12
A) 1.9 years
B) 2.3 years
C) 2.6 years
D) 2.1 years
Answer: D
Business
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