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Solve 1 d , 2 d , 3 d , 4 d . 1 a . Annuity EQ: Payback period = Cost / Annual cash
Solve dddd
a Annuity EQ: Payback period Cost Annual cash flow
b Rule: Accept the project if the the cutoff period.
c EX: Evaluate a project costing $ and returning $ annually for three years using the PP method and a year cutoff period. $ years ACCEPT
d Problem: Evaluate a project costing $ and returning $ annually for two years using the PP method and a year cutoff period.
a Mixedstream EQ: Payback period Last year before recovery Shortfall Next year's cash flow
b Rule: Accept the project if the the cutoff period.
c EX: Evaluate a project costing $ and returning $$ and $ in years using the PP method and a year cutoff period. $ REJECT
d Evaluate a project costing $ and returning $$ and $ over years using the PP method and a year cutoff period.
a EQ: Discounted payback period Same as a after the inflows are discounted
b Rule: Accept the project if the DPP the cutoff period.
c EX: Evaluate a project costing $ and returning $ and $ in years and using the DPP method, a discount rate and a year cutoff. DPP $ ACCEPT
d Problem: Reevaluate the project in d using the DPP method, an discount rate and a year cutoff period.
a : Net present value of inflows Cost
b Rule: Accept the project if the NPV $
c EX: Reevaluate the project in using the NPV method and a discount rate.
$$$ REJECT
d Reevaluate the project in using the NPV method and a discount rate.
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