Question
Two new software projects are proposed to a young, start-up company. The Alpha project will cost $225,000 to develop and is expected to have annual
Two new software projects are proposed to a young, start-up company. The Alpha project will cost $225,000 to develop and is expected to have annual net cash flow of $40,000. The Beta project will cost $165,000 to develop and is expected to have annual net cash flow of $30,000. The company is very concerned about their cash flow. Calculate the payback period for each project. Which project is better from a cash flow standpoint? (Round your answers to 2 decimal places.)
The payback period for project Alpha____ years.
The payback period for project Beta___years.
The better project is___.
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