1. Example Exercise 2 Cash Payback Method Cash Payback Method
The expected period of time between the date of an investment and the recovery of the cash invested is the cash payback period.

2. Example Exercise 2 Cash Payback Method
It is computed by dividing [CLICK] the initial cost by the annual net cash flow.

3. 2 Example Exercise 2 $105,000 = 3.5 years $30,000 2
Cash Payback Period
$105,000
$30,000
= years =
For this example exercise, we need to determine the cash payback period for a project that has estimated annual net cash flows of $30,000. The cash payback period is [CLICK] 3.5 years.

4. Example Exercise 2 2 2 2
2A, 2B
Refer to Practice Exercises PE 2A and PE 2B to practice calculating the cash payback period.