Canada Golf Club (CGC) is considering three independent projects for July 2021 tournament. The three projects are project A, project B and project C. Given the following cash flow information, calculate the payback period for each. If CGC requires a 3-year payback before an investment can be made, which project(s) would be accepted? Year Project A ($) project B ($) Project C ($) 0 (Investment) -2,000 -10,000 -5,000 1 -2,000 -6000 -2,000 2 800 4,000 5,000 3 600 3000 5,000 4 600 2000 5000 5 400 2000 2,000
Canada Golf Club (CGC) is considering three independent projects for July 2021 tournament. The three projects are project A, project B and project C. Given the following cash flow information, calculate the payback period for each. If CGC requires a 3-year payback before an investment can be made, which project(s) would be accepted? Year Project A ($) project B ($) Project C ($) 0 (Investment) -2,000 -10,000 -5,000 1 -2,000 -6000 -2,000 2 800 4,000 5,000 3 600 3000 5,000 4 600 2000 5000 5 400 2000 2,000
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Canada Golf Club (CGC) is considering three independent projects for July 2021 tournament. The three projects are project A, project B and project C. Given the following cash flow information, calculate the payback period for each. If CGC requires a 3-year payback before an investment can be made, which project(s) would be accepted?
| Year | Project A ($) | project B ($) | Project C ($) |
| 0 (Investment) | -2,000 | -10,000 | -5,000 |
| 1 | -2,000 | -6000 | -2,000 |
| 2 | 800 | 4,000 | 5,000 |
| 3 | 600 | 3000 | 5,000 |
| 4 | 600 | 2000 | 5000 |
| 5 | 400 | 2000 | 2,000 |
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