Question
1. (Payback period calculations) You are considering three independent projects: project A, project B, and project C. Given the cash flow information calculate the payback
1. (Payback period calculations) You are considering three independent projects: project A, project B, and project C. Given the cash flow information calculate the payback period for each. If you require a 3-year payback before an investment can be accepted, which project(s) would be accepted?
PROJECT A | PROJECT B | PROJECT C |
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Initial Outlay | $-900 | $-11, 000 | -$-5, 000 | ||||
Inflow year 1 | $600 | $6,000 | $2,000 | ||||
Inflow year 2 | $300 | $2,000 | $2,000 | ||||
Inflow year 3 | $200 | $2,000 | $4,000 | ||||
Inflow year 4 | $100 | $2,000 | $4,000 | ||||
Inflow year 5 | $600 | $2,000 | $4,000 |
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What is the payback period of project A? years (Round to two decimal places.) ANSWER:
What is the payback period of project B? years (Round to two decimal places.) ANSWER:
What is the payback period of project C? years (Round to two decimal places.) ANSWER:
2.
YEAR | PROJECT CASH FLOW |
| |
0 | $-100,000 | ||
1 | $20,000 | ||
2 | $60,000 | ||
3 | $70,000 | ||
4 | $50,000 | ||
5 | $40,000 |
(Discounted payback period) Sheinhardt Wig Company is considering a project that has the following cash flows: If the project's appropriate discount rate is 10 percent, what is the project's discounted payback period? The project's discounted payback period is years. (Round to two decimal places.) ANSWER:
ANSWER EACH (BOTH) QUESTION CORRECTLY AND FULLY!!!
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