Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Comparing payback period and discounted payback period Mathew inc is debating using the payback period versus the discounted payback period for smal-dolar projects The

image text in transcribed

Comparing payback period and discounted payback period Mathew inc is debating using the payback period versus the discounted payback period for smal-dolar projects The company's information officer has submited a new computer project with a cost of $15,000 The cash flow will be $5,333 each year for the next five years. The cutif period used by t company is 3 years The information officer states that t doesnt matter which model the company uses for the decision, the project is clearly acceptable Demonstrate for the infomaton officer that the selection of the model does matter What is the payback period for the project? years (Round to one decimal place.) Calculate the discounted payback period for the project at any positive discount rate, say 1% Therefore, with the payback period the project is whereas with the discounted payback period the project is

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Intermediate Accounting

Authors: J. David Spiceland, James Sepe, Mark Nelson

6th edition

978-0077328894, 71313974, 9780077395810, 77328892, 9780071313971, 77395816, 978-0077400163

More Books

Students also viewed these Accounting questions

Question

What are conversion costs? What are prime costs?

Answered: 1 week ago