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At Bostaan Incorporation uses discounted payback period for projects under $25,000 and has a cut off period of 4 years for these small value projects.
At Bostaan Incorporation uses discounted payback period for projects under $25,000 and has a cut off period of 4 years for these small value projects. Two projects, R and S are under consideration. The anticipated cash flows for these two projects are listed below. If Al Bostaan Incorporation uses an 8% discount rate on these projects are they accepted or rejected? If they use 12% discount rate? If they use a 16% discount rate? What do you notice about the payback period as the discount rate rises? Explain this relationship
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