Dynetics Corp. has the following investment opportunities: Machine A Machine B Machine C ($10,000 cost) ($22,500 cost) ($35,500 cost) Year 1 $6,000 Year 1 $12,000 Year 1 0 Year 2 3,000 Year 2 7,500 Year 2 30,000 Year 3 3,000 Year 3 1,500 Year 3 5,000 Year 4 0 Year 4 1,500 Year 4 20,000 Under the payback method and assuming these machines are mutually exclusive, which machine(s) would Dynetics Corp. choose? a. Machine A b. Machine B c. Machine C Od. None of these choices are correct.
Dynetics Corp. has the following investment opportunities: Machine A Machine B Machine C ($10,000 cost) ($22,500 cost) ($35,500 cost) Year 1 $6,000 Year 1 $12,000 Year 1 0 Year 2 3,000 Year 2 7,500 Year 2 30,000 Year 3 3,000 Year 3 1,500 Year 3 5,000 Year 4 0 Year 4 1,500 Year 4 20,000 Under the payback method and assuming these machines are mutually exclusive, which machine(s) would Dynetics Corp. choose? a. Machine A b. Machine B c. Machine C Od. None of these choices are correct.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Dynetics Corp. has the following investment opportunities:
Machine A
Machine B
Machine C
($10,000 cost)
($22,500 cost)
($35,500 cost)
Year 1
$6,000
Year 1
$12,000
Year 1
0
Year 2
3,000
Year 2
7,500
Year 2
30,000
Year 3
3,000
Year 3
1,500
Year 3
5,000
Year 4
0
Year 4
1,500
Year 4
20,000
Under the payback method and assuming these machines are mutually exclusive, which machine(s) would Dynetics Corp. choose?
a. Machine A
b. Machine B
c. Machine C
Od. None of these choices are correct.
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