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Consider the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) 0 $344,371 $15,617 1 28,800 5,239 2 58,000 8,576 3 52,000
Consider the following two mutually exclusive projects:
| Year | Cash Flow (A) | Cash Flow (B) |
| 0 | $344,371 | $15,617 |
| 1 | 28,800 | 5,239 |
| 2 | 58,000 | 8,576 |
| 3 | 52,000 | 13,631 |
| 4 | 422,000 | 8,710 |
Whichever project you choose, if any, you require a 6 percent return on your investment.
| a. What is the payback period for Project A? |
| b. What is the payback period for Project B? |
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Handbook Of The Economics Of Finance Corporate Finance Volume 1A
Authors: George M. Constantinides, M. Harris, Rene M. Stulz
1st Edition
