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Elysian Fields, Inc. uses a maximum payback period of 6 years and currently must choose between two mutually exclusive projects. Project Hydrogen requires an initial
Elysian Fields, Inc. uses a maximum payback period of 6 years and currently must choose between two mutually exclusive projects. Project Hydrogen requires an initial outlay of $29,000; project Helium requires an initial outlay of $33,000. Using the expected cash inflows given for each project in the following table:
Calculate each project's payback period. Which project meets Elysian's standards?
Year 1 2 Expected cash inflows Hydrogen Helium $6,500 $7,500 $5,000 $7,500 $8,500 $8,000 $5,000 $6,000 $2,500 $5,500 $3,000 $3,000 3 4 5 6Step by Step Solution
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