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Stenson, Inc., imposes a payback cutoff of three years for its international investment projects. Assume the company has the following two projects available. Year Cash
Stenson, 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 | $ | 75,000 | $ | 125,000 |
1 | 33,000 | 29,000 | ||
2 | 36,000 | 32,000 | ||
3 | 15,000 | 53,000 | ||
4 | 9,000 | 240,000 | ||
a. | What is the payback period for each project? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) |
b. | Which, if either, of the projects should the company accept? |
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