What is the payback rate and year of payback

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Question - Calculate payback rule - Suppose you have sum of the cash flows for the 3 years is $180 from the total investment $200, leaving with $20 (200 -180). Cash flow on 4 years is $70, the payback occurs sometimes in that year. When you compare with $20 you need to the $70 that will be coming in.

a) What is the payback rate and year of payback?

b) Provide interpretation to support your calculation?

Reference no: EM133064573

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