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Payback period of the project

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Reference no: EM131068712

A business owner is considering an investment project. The capital cost of the project is £1,000,000, considered to occur in year 0. The estimated returns are as follows:

  • Year 1 net cash inflow £250,000
  • Year 2 net cash inflow £400,000
  • Year 3 net cash inflow £400,000
  • Year 4 net cash inflow £225,000

(a) Calculate the payback period of the project in years and months.

Reference no: EM131068712

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