A company is considering investing in a new machinery. There are actually two potential projects, Project A and B. Both have a 5-year life and initial cost of ₱350,000. Project A is expected to generate ₱115,000 of cash inflows annually while the latter generates ₱100,000 on the first year, ₱115,000 on the second, ₱130,000 on the third, ₱145,000 on the fourth, and ₱150,000 on its fifth year. What is the payback period for Project A and B (two decimal places) Assuming the company requires a 5 years payback period for potential projects and Project A and B are independent projects. Which of the two should be chosen by the company?
A company is considering investing in a new machinery. There are actually two potential projects, Project A and B. Both have a 5-year life and initial cost of ₱350,000. Project A is expected to generate ₱115,000 of cash inflows annually while the latter generates ₱100,000 on the first year, ₱115,000 on the second, ₱130,000 on the third, ₱145,000 on the fourth, and ₱150,000 on its fifth year. What is the payback period for Project A and B (two decimal places) Assuming the company requires a 5 years payback period for potential projects and Project A and B are independent projects. Which of the two should be chosen by the company?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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A company is considering investing in a new machinery. There are actually two potential projects, Project A and B. Both have a 5-year life and initial cost of ₱350,000. Project A is expected to generate ₱115,000 of
What is the payback period for Project A and B (two decimal places)
Assuming the company requires a 5 years payback period for potential projects and Project A and B are independent projects. Which of the two should be chosen by the company?
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