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    Question

    A project requires an initial investment of ₹10,00,000

    and is expected to generate cash inflows of ₹4,00,000 per annum for 3 years. The Payback Period (in years) is:
    A 2.5 Correct Answer Incorrect Answer
    B 2.0 Correct Answer Incorrect Answer
    C 3.0 Correct Answer Incorrect Answer
    D 2.75 Correct Answer Incorrect Answer

    Solution

    Payback Period = Initial Investment / Annual Cash Inflow = 10,00,000 / 4,00,000 = 2.5 years.

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