How to calculate payback period?

The cummulative Cash flow in yr 2 is 209500 i.e.(99500+110000), bt total cash flow is 200000 only so Rs.200000 must be earned between yr 1 & yr 2 so yr 1 is taken & nor year 2 or 3.

how shall i take base yr is it depends upon cash outflow ?

110000 how come?

its not base year... assume that u have invested 2 lacs and estimating that u get cash inflow as u mentioned above during 5 years.. now u think how much time it take to recover ur investment of 2 lacs. in first year u get 95000, it means u need 105000 more to recover the amount u invested..in second year u r getting 110000.. mean u got 110000 in 12 month (2nd year). now calculate how much time it required to get 105000.. 110000/12= 9167.. means average monthly cashinflow is 9167.. now 105000/9167= 11 month(approx.).. payback period is 1 year 11 month.. u recover ur money in 1 year 11 month.. as per my knowledge.. please correct if i m wrong..