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    Question

    A project requires initial outlay ₹2,00,000 and

    produces net cash inflows ₹50,000 annually for 6 years. Simple payback period is:
    A 3 years 6 months Correct Answer Incorrect Answer
    B 4 years Correct Answer Incorrect Answer
    C 4 years and 0 months Correct Answer Incorrect Answer
    D 5 years Correct Answer Incorrect Answer

    Solution

    Payback Period = Initial Investment / Annual Cash Inflow = 2,00,000 / 50,000 = 4 years.

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