06-08-2010, 04:31 PM
It's true what you've just said that payback questions don't mention when cashflows will be received. (In fact they usually assume it will be received over the year with each day contributing an equal amount to any other day.)
Lately I got a question in which it was assumed that cash flows were paid at the end of the year and it got me thinking. I worked it in a way that the result was 3 years (as per this example).
My reasoning behind it was that if cash flows are received at the end of the year than the project could not be considered to have been paid back during the year since no funds would have been received.
Lately I got a question in which it was assumed that cash flows were paid at the end of the year and it got me thinking. I worked it in a way that the result was 3 years (as per this example).
My reasoning behind it was that if cash flows are received at the end of the year than the project could not be considered to have been paid back during the year since no funds would have been received.
