Question
(Payback period calculations) You are considering three independent projects: project A, project B, and project C. Given the cash flow information in the popup window
(Payback period calculations) You are considering three independent projects: project A, project B, and project C. Given the cash flow information in the popup window
a) calculate the payback period for each.
b) If you require a 3-year payback before an investment can be accepted, which project(s) would be accepted?\
| 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 | |||
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Governmental and Nonprofit Accounting
Authors: Robert Freeman, Craig Shoulders, Gregory Allison, Robert Smi
10th edition
132751267, 978-0132751261
