Question
Consider the following table. The payback period cutoff is two years. Both projects cost R2.5-million. Year Project X Project Y 1 R1-million R1.75-million 2 R1-million
Consider the following table. The payback period cutoff is two years. Both projects cost R2.5-million.
Year Project X Project Y
1 R1-million R1.75-million
2 R1-million R1.75-million
3 R1-million 0
4 R1-million 0
Which would you pick using the payback rule? Provide three reasons justifying your answer.
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Financial Management
Authors: I.M. Pandey
11th Edition
9325982293, 978-9325982291
