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Question 13 Not yet Payback period lets the decision-maker quickly compare independent investments without considering interest. In this example, Acme Toys is considering investing in
Question 13 Not yet Payback period lets the decision-maker quickly compare independent investments without considering interest. In this example, Acme Toys is considering investing in product 1 or product 2. Acme Toys requires a payback period of less than 6 years. Based on this rule, what should Acme Toys do? answered Marked out of Product 1 Product 2 1.00 30,000 $ First Cost $ Annual Revenue $ 5.000 $ p Flag question Annual Cost $ 1,000 $ 10,000 $ 60,000 8,000 1,200 20,000 10 $ Scrap Value Service Life 5 O a. Product 1 meets the payback criteria and should be chosen. O b. Both products fall beneath Acme Toys payback period rule so it should reject both according to this rule. C. a Product 1 should be chosen as it has the lowest payback period. O d. Acme Toys should invest in both, they have NPW>0
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