Question
Problem 8-3 Calculating Payback [LO 1] Global Toys, Inc., imposes a payback cutoff of three years for its international investment projects. Assume the company has
Problem 8-3 Calculating Payback [LO 1]
| Global Toys, Inc., imposes a payback cutoff of three years for its international investment projects. Assume the company has the following two projects available.
|
| Year | Cash Flow A | Cash Flow B | ||
| 0 | $ | 49,000 | $ | 94,000 |
| 1 | 19,000 | 21,000 | ||
| 2 | 25,400 | 26,000 | ||
| 3 | 21,000 | 33,000 | ||
| 4 | 7,000 | 246,000 | ||
| Requirement 1: |
| What is the payback period for each project? (Do not round intermediate calculations. Round your answers to 2 decimal places (e.g., 32.16).) |
| Payback period | |
| Project A | years |
| Project B | years |
| Requirement 2: |
| Should it accept either of them? |
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Cash Confident An Entrepreneurs Guide To Creating A Profitable Business
Authors: Melissa Houston
1st Edition
1637586361, 978-1637586365
