Question
CraneManufacturing Co. is evaluating two projects. The company uses payback criteria of three years or less. Project A has a cost of $1,072,640, and project
CraneManufacturing Co. is evaluating two projects. The company uses payback criteria of three years or less. Project A has a cost of $1,072,640, and project B's cost is $1,128,800. Cash flows from both projects are given in the following table.
Year Project A Project B
1 $86,212 $586,212
2 313,562 413,277
3 427,594 231,199
4 285,552
What are their discounted payback periods?(Round answers to 2 decimal places, e.g. 15.25. If discounted payback period exceeds life of the project,enter 0.00for the answer.)
Discounted payback period of project A Discounted payback period of project B
Which will be accepted with a discount rate of 8 percent?
Craneshould choose:
A)Project B
B)neither project
C)Project A
D)Both projects
.
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