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Dear Mr.John,
I feel difficult in understanding the below statement
What is the Payback period on the assumption that cash flow are received evenly each year.
The question related to Mock test LJM CO
After 2 years they will have got back 100,000, so they need an extra 60,000.
In the third year the receive 80,000 and so if the cash is received evenly throughout the year, it will take 60,000/80,000 years (or 9 months)
So in total 2 years 9 months.
It is the normal assumption we make when calculating the payback period.
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