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SOLOMON - Graded Activity 2 Part 4 Unit 4
SOLOMON - Graded Activity 2 Part 4 Unit 4
SOLOMON - Graded Activity 2 Part 4 Unit 4
BSEE - 1
GIT 2995
Part 4: Unit 4
Solution:
Payback period = Years before full recovery + unrecovered amount at the start of
the period Cash flow during the period
Project 1
0 1 2 3 4 5
-1000 600 400 200 200 100
2+ 0 = 2 Years
200
Project 2
0 1 2 3 4 5
-1000 100 400 600 600 700
2+600 = 3 Years
600