Worthington Inc. is considering a project that has the following cash flow data. What is the project's payback period?

Year 0 1 2 3

Cash flows - $500 $150 $200 $300

The project's payback period is 2.5 years.

Explanation:

year cash flow comulative cash flow

0 - 500 - 500

1 150 - 350

2 200 - 150

3 300

payback period = 2 years + 150-300

= 2.5 years

Therefore, The project's payback period is 2.5 years.