Long-term investment​ decision, payback method Personal Finance Problem    Bill Williams has the opportunity to invest in project A that costs $6,400 today and promises to pay $2,100​, $2,600​, $2,600​, $2,000 $1,800 over the next 5 years. ​  Or, Bill can invest $6,400 in project B that promises to pay $1,600​, $1,600​, $1,600​, $3,600 $3,900 over the next 5 years.   ​(​Hint: For mixed stream cash​ inflows, calculate cumulative cash inflows on a​ year-to-year basis until the initial investment is recovered.​)   a.  How long will it take for Bill to recoup his initial investment in project​ A? b.  How long will it take for Bill to recoup his initial investment in project​ B?

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
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​Long-term investment​ decision, payback method Personal Finance Problem   

Bill Williams has the opportunity to invest in project A that costs

$6,400 today
and promises to pay
$2,100​,
$2,600​,
$2,600​,
$2,000
$1,800

over the next 5 years. ​ 

Or, Bill can invest

$6,400 in project B that
promises to pay
$1,600​,
$1,600​,
$1,600​,
$3,600
$3,900

over the next 5 years.  

​(​Hint:

For mixed stream cash​ inflows, calculate cumulative cash inflows on a​ year-to-year basis until the initial investment is

recovered.​)
 
a.  How long will it take for Bill to recoup his initial investment in project​ A?
b.  How long will it take for Bill to recoup his initial investment in project​ B?
 
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