Question
McKernan Inc. imposes a payback cutoff of three years for its international investment projects. The company has the following two projects Year Cash Flow (A)
McKernan Inc. imposes a payback cutoff of three years for its international investment projects. The company has the following two projects
| Year | Cash Flow (A) | Cash Flow (B) | |||||
| 0 | $ | 101,600 | $ | 118,000 | |||
| 1 | 39,000 | 31,000 | |||||
| 2 | 44,000 | 34,000 | |||||
| 3 | 37,000 | 42,000 | |||||
| 4 | 24,000 | 246,000 | |||||
What is the payback period for both projects? (Round the final answers to 2 decimal places.)
| Payback period | |
| Project A | years |
| Project B | years |
Which project should the company accept?
multiple choice
-
Project A
-
Project B
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Multinational Business Finance
Authors: David K. Eiteman, Arthur I. Stonehill, Michael H. Moffett
6th Edition
0201538997, 978-0201538991
