Need a simple answer

[jeanthree7]

What will be the payback period if the initial after-tax cost is $5,000.00 and it is expected to provide after-tax operating cash flows of $1,800,00 in year 1, $1,900,00 in year 2, $700,000 in year 3, and 1,800,00 in year 4?

[mormess]

Ask a simple question, get a simple answer. Your question has flummoxed me but my first thought is that this is a UK forum and as such things may be different from the US.

Some description of context might help us to answer though, unless this is a situation that some clever person recognises!

Or is it a question from a business studies paper?

[buildersmate]

Three and one third years?
$1800 paid back after one year
$1800+$1900 paid back after 2 ($3700 in total)
$1800+$1900+$700 after 3 ($4400 in total)
After another 4 months, $600 of the average paid back in the fourth year pays back the full $5000.
Total 3 and one third.

[factor-fiction]

Buildersmate's answer is okay based on the information given.
Usually these questions involve a discount factor to reflect the fact that �1000 in 3 years time is worth less in real terms than �1000 today. Was there a rate of interest mentioned in your homework question, jeanthree7?

[buildersmate]

Agree with that F30, but there's no discount rate mentioned so I assume it's a simpler question than one might have expected.