A company is considering investing in a project that will cost ₹3 lakh, will last for 5 years with straight line method of depreciation and salvage value of ₹20,000. Annual NPAT expected from project is ₹60,000. The pay-

CS Executive · Financial and Strategic Management · PYQS · June 2023
A company is considering investing in a project that will cost ₹3 lakh, will last for 5 years with straight line method of depreciation and salvage value of ₹20,000. Annual NPAT expected from project is ₹60,000. The pay-back period of the project will be :
(A) 5 years
(B) 2.59 years
(C) 2.50 years
(D) Cannot be determined with given information

Answer & Explanation:

Correct Answer: Option (B)

Official answer key: (B).

Topics: Financial Management

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