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why not? (Payback and discounted payback period calculations) The Bar-None Manufacturing Co. manufactures fence panels used in cattle feed lots throughout the Midwest. Bar-None's management

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why not? (Payback and discounted payback period calculations) The Bar-None Manufacturing Co. manufactures fence panels used in cattle feed lots throughout the Midwest. Bar-None's management is considering three investment projects for next year but doesn't want to make any investment that requires more than three years to recover the firm's initial investment. The cash flows for the three projects (Project A, Project B, and Project C) are as follows: a. Given Bar None's three-year payback period, which of the projects will qualify for acceptance? b. Rank the three projects using their payback period. Which project looks the best using this criterion? Do you agree with this ranking? Why or c. Bar-None uses a discount rate of 10.2 percent to analyze projects, what is the discounted payback period for each of the three projects? If the firm still maintains its three-year payback policy for the discounted payback, which projects should the firm undertake? me maximum acceptable paypack penog select trom the crop-rown menus) b. Rank the three projects using their payback period. The project with the shortest payback period is The project with the second shortest payback period is The project with the longest payback period is V. Therefore the project which tooks bost using the payback criterion is (Select from the drop-down menus.) Do you agree with this ranking? Why or why not? (Select the best choice below.) OA. No, the payback method ignores the time value of money O B. No, the payback method ignores cash flows that are generated by the project beyond the end of the payback period, OC. No, there is no clear cut way to define the cutoff criterion for the payback period that is tied to the value creation potential of the Click to select your answerte) W P MO 78 @ ese counted payback period calculations) The Bar-None Manufacturing Co. manufactures fence panels use west. Bar-None's management is considering three investment projects for next year but doesn't want to m than three years to recover the firm's initial ash flows for the three projects (Project A, Project B, and Project C) are as follows: me's three Data Table Vith this projects bf the ti ses a disc s its three Year Project A Project B Project C y the 0 $(1,050) $(11.000) $(6,500) 1 ee projects 550 5,500 800 2 225 3,500 800 n the shorte 3 180 3,500 3,500 4 90 3,500 3,500 back period (Se 5 450 3,500 3,500 mus.) (Click on the icon in order to copy its contents into a spreadsheet) with this ran Print Done e payback me e payback memorgnores casinows that are generateur by the project beyond the error tre payback period. here is no clear-cut way to define the cutoff criterion for the payback period that is tied to the value creation potential ct your answer(s). 28 18 . w P

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