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Two new software projects are proposed to a young, start-up company. The Alpha project will cost $150,000 to develop and is expected to have an
Two new software projects are proposed to a young, start-up company. The Alpha project will cost $150,000 to develop and is expected to have an annual net cash flow of $40,000. The Beta project will cost $200,000 to develop and is expected to have an annual net cash flow of $50,000. The company is very concerned about its cash flow. Using the payback period, which project is better from a cash flow standpoint?
a. Alpha
b. Beta
c. Neither
d. Both Alpha and Beta
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