Question
The Dammon Corporation has the following investment opportunities. Solve fore the Payback and Modified Payback periods for each investment. Machine Cost A: $15,000 B: $22,500
The Dammon Corporation has the following investment opportunities. Solve fore the Payback and Modified Payback periods for each investment.
| Machine Cost | A: $15,000 | B: $22,500 | C: $37,500 |
| Cash Inflows Each Year: | |||
| Year 1 | $ 6,000 | $ 12,000 | $ 0 |
| Year 2 | $ 9,000 | $ 12,000 | $ 30,000 |
| Year 3 | $ 3,000 | $ 10,500 | $ 30,000 |
| Year 4 | 0 | $ 10,500 | $ 15,000 |
| Year 5 | 0 | 0 | $ 15,000 |
What is the payback period?
1. Payback period for Project A is:
2. Payback period for Project B is:
3. Payback period for Project C is:
Using a discount rate of 10%, what is the modified payback period for:
4. Modified Payback period for Project A is:
5. Modified Payback period for Project B is:
6. Modified Payback period for Project C is:
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