Q3 A project requires an initial outlay of N2.8m. with a life span of 5 years. Depreciation is at the rate of 20%. The cash profit from the project is expected to be N900,000,

A project requires an initial outlay of N2.8m. with a life span of 5 years. Depreciation is at the rate of 20%. The cash profit from the project is expected to be N900,000, N970,000, N950,000, N830,000 and N790,000 for years 1 to 5 respectively. The company�??s cost of capital is 18%. What is the payback period of the project?
 2 years 10 months
 2 years 8 months
 3 years
 4 years

 

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