1) Cricket T20 is considering three new projects in Australia, New Zealand and South Africa. Each one requires an investment of $25,000 and will last for three years. Each will produce the following net annual cash flows:

Year. Australia New Zealand. South Africa

1. $7,000 $9,600 $13,000

2 9,000 9,600 9,000

3. 12,000 9,600 11,000

Total $28,000 $28,800 $33,000

Cricket T20 will not accept any project with a payback period longer than two and a half years. Rank the projects by least desirable to most desirable, based on each project's cash payback period

a)Australia, New Zealand, South Africa

b)New Zealand, Australia, South Africa

c)South Africa, Australia, New Zealand

d)Australia, South Africa, New Zealand

2) Cricket T20 is considering three new projects in Australia, New Zealand and South Africa. Each one requires an investment of $25,000 and will last for three years. Each will produce the following net annual cash flows:

Year. Australia New Zealand. South Africa

1. $7,000 $9,600 $13,000

2 9,000 9,600 9,000

3. 12,000 9,600 11,000

Total $28,000 $28,800 $33,000

Cricket T20 will not accept any project with a payback period longer than two and a half years.

Cricket T20 wants to know why they should use the Cash payback technique.

		a)the technique is a quick way to calculate a project's net present value.
		b)the period is calculated by dividing the annual cash inflow by the cost of the capital investment.
		c)the technique is frequently used as a screening tool but it does not take into consideration the long-term profitability of a project.
		d)the longer the payback period the more attractive the investment.

3) Cricket T20 is considering three new projects in Australia, New Zealand and South Africa. Each one requires an investment of $25,000 and will last for three years. Each will produce the following net annual cash flows:

Year. Australia New Zealand. South Africa

1. $7,000 $9,600 $13,000

2 9,000 9,600 9,000

3. 12,000 9,600 11,000

Total $28,000 $28,800 $33,000

Cricket T20 will not accept any project with a payback period longer than two and a half years.

Cricket T20 wants to know what the main disadvantage of the cash payback technique. Select the correct answer to explain to Cricket T20:

		a)The cash payback technique ignores obsolescence factors.
		b)The cash payback technique ignores the cost of an investment.
		c)The cash payback technique is complicated to use.
		d)The cash payback technique ignores the time value of money

4)Cricket T20 is considering three new projects in Australia, New Zealand and South Africa. Each one requires an investment of $25,000 and will last for three years. Each will produce the following net annual cash flows:

Year. Australia New Zealand. South Africa

1. $7,000 $9,600 $13,000

2 9,000 9,600 9,000

3. 12,000 9,600 11,000

Total $28,000 $28,800 $33,000

Cricket T20 will not accept any project with a payback period longer than two and a half years.

Australia's cash payback period is

		a)2.75
		b)2.60
		c)2.27
		d)1.12

5)Cricket T20 is considering three new projects in Australia, New Zealand and South Africa. Each one requires an investment of $25,000 and will last for three years. Each will produce the following net annual cash flows:

Year. Australia New Zealand. South Africa

1. $7,000 $9,600 $13,000

2 9,000 9,600 9,000

3. 12,000 9,600 11,000

Total $28,000 $28,800 $33,000

Cricket T20 will not accept any project with a payback period longer than two and a half years.

New Zealand's cash payback period is

		a)2.75 years
		b)2.60 years
		c)2.27 years
		d)1.15 years