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    • Question

      A project requires an initial investment of ₹5,00,000

      and is expected to generate annual cash inflows of ₹1,00,000. What is the payback period for the project?
      A 2 years Correct Answer Incorrect Answer
      B 4 years Correct Answer Incorrect Answer
      C 5 years Correct Answer Incorrect Answer
      D 6 years Correct Answer Incorrect Answer
      E 3 years Correct Answer Incorrect Answer

      Solution

      Payback Period = Initial Investment ÷ Annual Cash Inflow = ₹5,00,000 ÷ ₹1,00,000 = 5 years

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