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Madson Company is analyzing several proposed investment projects The firm has resources only for one project Project P Project Q Project R Project S Project
Madson Company is analyzing several proposed investment projects The firm has resources only for one project | ||||||||||||||||||||||
Project P | Project Q | Project R | Project S | Project T | ||||||||||||||||||
Cost of investment | $32,000 | $38,200 | $57,100 | $47,400 | $53,000 | |||||||||||||||||
Net cash flow | ||||||||||||||||||||||
Year 1 | $5,200 | $3,200 | $4,300 | $26,000 | $15,900 | |||||||||||||||||
Year 2 | $9,600 | $15,300 | $16,900 | $8,400 | $15,800 | |||||||||||||||||
Year 3 | $12,700 | $14,700 | $21,000 | $6,400 | $16,100 | |||||||||||||||||
Year 4 | $15,300 | $19,300 | $31,000 | $4,300 | $11,000 | |||||||||||||||||
Year 5 | $52,000 | $2,100 | $10,000 | |||||||||||||||||||
The company uses the payback period method for making capital investment decisions. On the basis of this decision model, which project should be selected? (Ignore taxes.) | ||||||||||||||||||||||
Project T | ||||||||||||||||||||||
Project Q | ||||||||||||||||||||||
Project P | ||||||||||||||||||||||
Project R | ||||||||||||||||||||||
None |
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