Consider the following cash flows, for four different projects: (a) Calculate the conventional payback period for each

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Consider the following cash flows, for four different projects:

Project Cash Flows A B D -$2,500 -$6,000 -$13,000 -$14,500 $600 $2,500 $6,000 $3,000 $4,000 $500 $1,000 $9,000 $500 $1,5


(a) Calculate the conventional payback period for each project.
(b) Determine whether it is meaningful to calculate a payback period for Project D.
(c) Assuming i = 10% calculate the discounted-payback period for each project.

Payback Period
Payback period method is a traditional method/ approach of capital budgeting. It is the simple and widely used quantitative method of Investment evaluation. Payback period is typically used to evaluate projects or investments before undergoing them,...
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