Comparing payback period and discounted payback period. ?Mathew, Inc. is debating using the payback period versus the discounted payback period for?small-dollar projects. The?company's information officer has submitted a new computer project with a cost of ?$24,000. The cash flow will be ?$8,000 each year for the next five years. The cutoff period used by the company is 3 years. The information officer states that it?doesn't matter which model the company uses for the?decision; the project is clearly acceptable. Demonstrate for the information officer that the selection of the model does matter.

This Quiz: 3 pts possible {I This Question: 1 pt { 2 of 3 (0 complete) V } Comparing payback period and discounted payback period. Mathew, Inc. is debating using the payback period versus the discounted payback period for small-dollar projects. The company's information ofcer has submitted a new computer project with a cost of $24,000. The cash ow will be $8,000 each year for the next ve years. The cutoff period used by the company is 3 years. The information ofcer states that it doesn't matter which model the company uses for the decision; the project is clearly acceptable. Demonstrate for the information ofcer that the selection of the model does matter. What is the payback period for the project? D years (Round to one decimal place.) Calculate the discounted payback period for the project at any positive discount rate, say 1%. the 3-year cutoff period. (Select from the drop-down menu.) The discounted payback period for the project is V Therefore, with the payback period the project is a V , whereas with the discounted payback period the project is a V ; so the selection of the method : (Select from the drop-down menus.)