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When the cash flows are the same every period after the initial investment in a project, the payback period is equal to?

Sagot :

The cash flows are the same every period after the initial investment in a project payback period=Investment required/net annual cash inflow. The net amount of cash and cash equivalents transferred into and out of a company is referred to as cash flow. Inflows are represented by cash received, while outflows are represented by money spent.

The ability of a company to generate positive cash flows or, more specifically, to maximize long-term free cash flow is fundamental to its ability to create value for shareholders (FCF). FCF is a company's cash generated from normal business operations after deducting any money spent on capital expenditures.

To learn more about cash flows, click here.

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