The payback period in years for Project X is:

A) 2.00.
B) 3.83.
C) 3.50.
D) 2.83.
E) 4.00.

Question

The payback period in years for Project X is:A) 2.00.B) 3.83.C) 3.50.D) 2.83.E) 4.00.

Kentrell Scruggs-Torrance · Accepted Answer

Final Answer : D, Explanation :  The payback period for Project X is 2 + (220,000-160,000)/60,000 = 2.83 years. Since Project Y has a payback period of 3.5 years, Project X has a shorter payback period and is the better choice.

The payback period in years for Project X is:

A) 2.00.
B) 3.83.
C) 3.50.
D) 2.83.
E) 4.00.

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