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Goodiva Chocolatier has a maximum payback period of 6 years, and it must choose between two mutually exclusive projects A & B. The information for
Goodiva Chocolatier has a maximum payback period of 6 years, and it must choose between two mutually exclusive projects A & B.
The information for each project is presented in the table.
Project A | Project B | |
Initial investment | $25,000 | $35,000 |
Year | Expected cash inflow | |
1 | $6,000 | $7,000 |
2 | $6,000 | $7,000 |
3 | $8,000 | $8,000 |
4 | $4,000 | $5,000 |
5 | $3,500 | $5,000 |
6 | $2,000 | $4,000 |
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