Problem:
A project manager is using the payback method to make the final decision on which project to undertake. The company has a 12% required rate of return and expects a 3% rate of inflation for the following four years. What is the non-discounted payback of a project that has cash flows as shown in the table? Annual Cash Flow 0 -$200,000 1 $50,000 2 $60,000 3 $70,000 4 $100,000