ocr: The Payback Formula If we assume the cash intlows during year 3(E175,000) are evenly distributed, we can calculate the precise payback period by applying the tollowing tormula: Period - Year 2 ++ Required Sum Payback Year: 3 Cashflow =2+f E500K - E350K/ /E175K =2+f £150K/E175K Payback Period =2.86 years Payback Advantages Payback Disadvantages
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