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    Question

    A project has initial investment ₹1,00,000 and

    expected cash inflows ₹30,000 each year for 5 years. Payback period is:
    A 3 years 4 months Correct Answer Incorrect Answer
    B 3 years 5 months Correct Answer Incorrect Answer
    C 3 years 8 months Correct Answer Incorrect Answer
    D 3 years 4 weeks Correct Answer Incorrect Answer
    E Exactly 4 years Correct Answer Incorrect Answer

    Solution

    Payback = 3 + (10,000/30,000) = 3.333 years ≈ 3 years 4 months.

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