Question
(Payback period calculations) You are considering three independent projects: project A, project B, and project C. Given the following free cash flow information, calculate the
- (Payback period calculations) You are considering three independent projects: project A, project B, and project C. Given the following free cash flow information, calculate the payback period for each.
| Project A | Project B | Project C | |
| Initial Outlay | -$1,000 | -$10,000 | -$5,000 |
| Inflow year 1 | 600 | 5,000 | 1,000 |
| Inflow year 2 | 300 | 3,000 | 1,000 |
| Inflow year 3 | 200 | 3,000 | 2,000 |
| Inflow year 4 | 100 | 3,000 | 2,000 |
| Inflow year 5 | 500 | 3,000 | 2,000 |
- If you receive a 3 year payback before an investment can be accepted, which project(s) would be accepted?
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Fundamentals Of Multinational Finance
Authors: Michael Moffett, Arthur Stonehill, David Eiteman
6th Edition
0134472136, 978-0134472133
