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Given the cash flows of the four projects: A, B, C, and D, and using the Payback Period decision model, which projects do you accept
Given the cash flows of the four projects: A, B, C, and D, and using the Payback Period decision model, which projects do you accept and which projects do you reject with a three year cut-off period for recapturing the initial cash outflow? Assume that the cash flows are equally distributed over the year for Payback Period calculations. Projects A B C D Cost $10,000 $45,000 $25,000 $2,000 Cash Flow Year One $4,000 $100,000 $40,000 $30,000 $20,000 Cash Flow Year Two $4,000 $10,000 $15,000 $20,000 $8,000 Cash Flow Year $4,000 $14,000 Three Cash Flow Year Four $4,000 $20,000 $10,000 $20,000 $15,000 Cash Flow year Five $4,000 $26,000 $0 Cash Flow Year Six $4,000 $32,000 $10,000 $0
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