Consider the following three projects. All three have an initial investment of $1,000,000.

Data Table:

Net Cash Inflows

Project L

Project M

Project N

Year

Annual

Accumulated

Annual

Accumulated

Annual

Accumulated

1

$125,000

$125,000

$175,000

$175,000

$500,000

$500,000

2

125,000

250,000

275,000

450,000

500,000

1,000,000

3

125,000

375,000

550,000

1,000,000

4

125,000

500,000

650,000

1,650,000

5

125,000

625,000

750,000

2,400,000

6

125,000

750,000

7

125,000

875,000

8

125,000

1,000,000

Requirements

1.	Determine the payback period of each project. Rank the projects from most desirable to least desirable based on payback.
2.	Are there other factors that should be considered in addition to the payback period?

Requirement 1. Determine the payback period of each project. Rank the projects from most desirable to least desirable based on payback. (Enter the payback period as anumeral.)

Project	Payback period
		years
		years
		years