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Calculate the payback period of the project

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Question - Koala Ltd is reviewing a capital investment proposal. The initial cost of the project is $100,000. It is estimated that there will be no salvage value at the end of the investment's life. Koala's required rate of return to evaluate new capital investment proposals is 12%. The following table lists the projected pattern of operating cash flows over the projects 5 year life.

Year Cash Flows ($)

1 22000

2 50000

3 13000

4 30000

5 22000

Required - Calculate the payback period of the above project.

Reference no: EM133013978

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