Payback period. Given the cash flow of two projects-A and B-in the following table, . and using the payback period decision model, which project(s) do you accept and which project(s) do you reject if you have a 3-year cutoff period for recapturing the initial cash outflow? For payback period calculations, assume that the cash flow is equally distributed over the year.
Payback period. Given the cash flow of two projects-A and B-in the following table, . and using the payback period decision model, which project(s) do you accept and which project(s) do you reject if you have a 3-year cutoff period for recapturing the initial cash outflow? For payback period calculations, assume that the cash flow is equally distributed over the year.
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
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
Transcribed Image Text:uring the initial cash outflow? For payback period calp
pack period for project A?
i Data Table
nd to one decimal place.)
(Click on the following icon in order to copy its contents into a spreadsheet)
Cash Flor
B.
$15,000
S7,500
S7.500
S7,500
S7.500
S7,500
S7.500
$90,000
$36,000
$27,000
$18,000
$9,000
SO
Cost
Cash flow year 1
Cash flow year 2
Cash flow year 3
Cash flow year 4
Cash flow year 5
Cash flow year 6
$0
Print
Done

Transcribed Image Text:Payback period. Given the cash flow of two projects-A and B-in the following table, E
period for recapturing the initial cash outflow? For payback period calculations, assume that the cash flow is equally distributed over the year.
and using the payback period decision model, which project(s) do you accept and which project(s) do you reject if you have a 3-year cutoff
What is the payback period for project A?
years (Round to one decimal place)
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