Question
A company is considering investing in loading equipment. The project would require an investment of $96173 and would have a useful life of 4 years.
A company is considering investing in loading equipment. The project would require an investment of $96173 and would have a useful life of 4 years. The cash flows associated with the project are the following:
| Year | Cash Flow |
|
| 1 | $52589 |
|
| 2 | 21570 |
|
| 3 | 42689 |
|
| 4 | 28939 |
|
|
What would the payback period of the project be?
Select one:
a. 3.00 years
b. 3.52 years
c. 1.83 years
d. 2.52 years
R8 Co. is considering one of three projects, each of which will cost $42000. The expected cash flows for each project are:
| Project A | Project B | Project C |
Year 1 | $10814 | $28003 | $3147 |
Year 2 | 21102 | 20985 | 15257 |
Year 3 | 11099 | 7359 | 13289 |
Year 4 | 8507 | 10664 | 17360 |
R8s maximum acceptable payback period for accepting projects is 2 years. What is the payback period of a project that would be considered acceptable?
Select one:
a. 1.50 years
b. 1.67 years
c. 3.59 years
d. 2.91 years
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