Baxter's Market is considering opening a new location with an initial cost of $428,700.This location is expected to generate cash flows of $132,400,$161,500,$187,800,and $201,000 in Years 1 to 4.What is the payback period?
A)1.86 years
B)2.72 years
C)1.31 years
D)2.54 years
E)2.31 years

Question

Quizplus · Accepted Answer

Payback period = 2 + ($428,700 - 132,400 - 161,500)= 2.72 years

Baxter's Market Is Considering Opening a New Location with an Initial