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The Damon Corp. has the following investment opportunities: Machine A ($15,000) Machine B ($22,500) Machine C ($37,500) Inflows Inflows Inflows year 1 $6,000 year 1
The Damon Corp. has the following investment opportunities:
Machine A ($15,000) | Machine B ($22,500) | Machine C ($37,500) |
Inflows | Inflows | Inflows |
year 1 $6,000 | year 1 $12,000 | year 1 $-0- |
year 2 9,000 | year 2 12,000 | year 2 30,000 |
year 3 3,000 | year 3 10,500 | year 3 30,000 |
year 4 -0- | year 4 10,500 | year 4 15,000 |
year 5 -0- | year 5 -0- | year 5 15,000 |
Under the payback method and assuming these machines are mutually exclusive, which machine(s) would Damon Corp. choose and how many years does it take to recoup the original investment?
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