Calculate the payback period of each project

Calculate the payback period of each project

Calculate the payback period of each project.

Botany Designs is looking to revamp its manufacturing facility and has two different options they can choose from. The initial investment for each option is $100,000. They have set a minimum payback requirement of 4 years. The cost of capital is going to be 11% for each project.

Cash Inflows for years 1-5 are:

Year Project Speedy (S) Project Quality (Q)
1 32000 22500
2 32000 22500
3 32000 22500
4 32000 22500
5 32000 22500