Question
A company is considering two mutually exclusive projects. The projected cash flows are as follows: Cash Flows: A Cash Flows: B Year 0 -$245,000 -$250,000
A company is considering two mutually exclusive projects. The projected cash flows are as follows:
| Cash Flows: A | Cash Flows: B | |
| Year | ||
| 0 | -$245,000 | -$250,000 |
| 1 | $70,500 | $60,000 |
| 2 | $85,000 | $60,000 |
| 3 | $90,000 | $70,000 |
| 4 | $125,000 | $110,000 |
a) The company's required rate of return is 8%. Which project, if either, should the company choose?
b) What is the discounted payback period for each?
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Accounting Principles Volume 2
Authors: Jerry J. Weygandt, Donald E. Kieso, Paul D. Kimmel, Barbara Trenholm, Valerie Warren, Lori Novak
8th Canadian Edition
1119502551, 1-119-50255-5, 978-1119502555
