alleryStart learning →Project X pays back in 3 years and Y in 4. With a 3.5-year cutoff, which is accepted?
AOnly project Y
BOnly project X
CBoth projects
DNeither project
Answer & Solution
Correct answer: B. Only project X
Only X recovers its outlay within the 3.5-year cutoff period set by management.
Keep practising Payback Period
Browse all Payback Period questions for CA Inter, or explore more Financial Management topics.
Related questions
Why may payback overlook a valuable long-life project?Rs 1,000 is invested, returning Rs 500 at the end of years 1 and 2. Payback?Energy payback period is the time over which what equals energy spent?Which of these is a simplified capital budgeting method?Surplus cash from a firm's present and past earnings is called what?The real value of capital budgeting lies mainly in doing what?Which technique expresses NPV as an annualised cash flow?When may one project have several possible IRRs?