alleryStart learning →A project costs Rs 1,00,000 and returns Rs 40,000, Rs 50,000 and Rs 60,000 in years 1 to 3. Payback in years is about
A2.17
B2.50
C1.80
D3.00
Answer & Solution
Correct answer: A. 2.17
After two years Rs 90,000 is recovered; the remaining Rs 10,000 of Rs 60,000 takes 1/6 year, so payback is 2.17 years.
Keep practising Capital Budgeting
Browse all Capital Budgeting questions for CA Final, or explore more Strategicfinancialmanagement topics.
Related questions
R&D managers can use real options valuation to handle uncertainty whenA benefit of NPV for a firm with several projects is that NPVs areNPV accuracy relies heavily on the chosenSensitivity analysis studies how uncertainty in a model's output relates to itsAdjusted present value equals equity-financed NPV plus theA Rs 50,000 cash flow in a year has 60% probability; discount rate 10%. Risk-adjusted PV irNPV is the standard valuation method in which industry?Risk-adjusted NPV multiplies each cash flow by the