SOLOMON - Graded Activity 2 Part 4 Unit 4

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SOLOMON, PATRICK OSWALD G.

BSEE - 1
GIT 2995

Part 4: Unit 4

YEAR PROJECT 1 PROJECT 2


0 -1000 -1000
1 600 100
2 400 400
3 200 600
4 200 600
5 100 700

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

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