Question
Offshore Drilling Products, Inc.., imposes a payback cutoff of three years for its international investment projects. If the company has the following two projects available,
Offshore Drilling Products, Inc.., imposes a payback cutoff of three years for its international investment projects. If the company has the following two projects available, should it accept either of them?
| Year | Cash Flow (A) | Cash Flow (B) |
| 0 | -$45,000 | -$90,000 |
| 1 | 17,000 | 19,000 |
| 2 | 23,000 | 24,000 |
| 3 | 19,000 | 35,000 |
| 4 | 5,000 | 250,000 |
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Handbook Of Financial Econometrics
Authors: Yacine Ait-Sahalia, Lars Peter Hansen
1st Edition
044450897X, 978-0444508973
