Question
Compute the payback periods and decide which project is better based on the following information. Project A B Cost of investment $4,000,000 $380,000 Cash flow
Compute the payback periods and decide which project is better based on the following information.
| Project | A | B |
| Cost of investment | $4,000,000 | $380,000 |
| Cash flow before depreciation and taxes (30%) | $950,000 | $80,000 |
| Use straight line and economic life | 10 years | 10 years |
| Salvage Value | 0 | 0 |
| Payback period | ? | ? |
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Financial Accounting Theory And Analysis Text And Cases
Authors: Richard G. Schroeder, Myrtle W. Clark, Jack M. Cathey
9th Edition
9780470128817
