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    Question

    Project A has an initial outflow of ₹2,00,000 and

    annual cash inflows of ₹70,000 for 5 years. What is the Payback Period?
    A 2.86 years Correct Answer Incorrect Answer
    B 3.00 years Correct Answer Incorrect Answer
    C 2.50 years Correct Answer Incorrect Answer
    D 3.50 years Correct Answer Incorrect Answer

    Solution

    Payback Period = Initial Investment / Annual Cash Inflow = ₹2,00,000 / ₹70,000 = 2.857 years ≈ 2.86 years.

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