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Perryman Crafts Corp. is evaluating two independent capital projects that together will cost the company $250,000. The two projects will provide the following cash flows:
Perryman Crafts Corp. is evaluating two independent capital projects that together will cost the company $250,000. The two projects will provide the following cash flows: Which project will be chosen if the company's payback criterion is three years? What if the company accepts all projects as long as the payback period is less than five years?
Year | Project A | Project B |
1 | $80,750 | $32,450 |
2 | $93,450 | $76,125 |
3 | $40,325 | $153,250 |
4 | $145,655 | $96,110 |
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