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If the cost of a project is Rs 1500000 and the firm a receives annual cash in flow of Rs 600000 find out the pay back period. |
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Answer» P = I/R Where, P = Pay- back period, I = Investment or cost of project, R = Return from investment Given, Cost of Project (I) Rs 1500000 Return from investment =(R) 600000 P = 1500000/600000 = 2.5 years So, Pay-back period is 2yrs and 6 moths |
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