Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Pharoah Manufacturing Co. is evaluating two projects. The company uses payback criteria of three years or less. Project A has a cost of $901,000, and

Pharoah Manufacturing Co. is evaluating two projects. The company uses payback criteria of three years or less. Project A has a cost of $901,000, and project Bs cost is $1,268,100. Cash flows from both projects are given in the following table. Year Project A Project B 1 $86,212 $586,212 2 313,562 413,277 3 427,594 231,199 4 285,552 What are their discounted payback periods? (Round answers to 2 decimal places, e.g. 15.25. If discounted payback period exceeds life of the project, enter 0.00 for the answer.) Discounted payback period of project A 0.00 Discounted payback period of project B 0.00 Which will be accepted with a discount rate of 8 percent? Pharoah should choose

Please show not using excel or financial calculator functions

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

International Finance For Non Financial Managers

Authors: Dora Hancock

1st Edition

0749480017, 9780749480011

More Books

Students also viewed these Finance questions