When investing for your corporation you need to consider the cost that your firm must pay over time. At what point is the payback period? The payback period is given in years and parts of a year. For instance, let’s say a corporation invests $300,000 in new machinery. The new machinery produces a cash flow of $100,000 per year, then the payback period is 3.0 years.
The formula for Payback Period is equal to the initial investment divided by the cash inflow per period if it is even. In the problem you’ve been given the answer for the payback period is 4.86 years. In order to make a corporation work, an investment would need to be made. It takes money to make money is any business venture.
Answer Anonymously
Copy Link
