Portland Gaming, Inc. uses payback to evaluate potential projects and has a required payback period of four years for all projects. Currently, Portland is evaluating two independent projects. Project A has an expected payback period of 3.6 years and a net present value of $8,400. Project B has an expected payback period of 4.2 years with a net present value of $26,800. Which projects should be accepted based on the payback decision rule? Group of answer choices Project A only Project B only Both A and B Neither A nor B Answer cannot be determined based on the information given.
Portland Gaming, Inc. uses payback to evaluate potential projects and has a required payback period of four years for all projects. Currently, Portland is evaluating two independent projects. Project A has an expected payback period of 3.6 years and a net present value of $8,400. Project B has an expected payback period of 4.2 years with a net present value of $26,800. Which projects should be accepted based on the payback decision rule? Group of answer choices Project A only Project B only Both A and B Neither A nor B Answer cannot be determined based on the information given.
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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Portland Gaming, Inc. uses payback to evaluate potential projects and has a required payback period of four years for all projects. Currently, Portland is evaluating two independent projects. Project A has an expected payback period of 3.6 years and a net present value of $8,400. Project B has an expected payback period of 4.2 years with a net present value of $26,800. Which projects should be accepted based on the payback decision rule?
Group of answer choices
Project A only
Project B only
Both A and B
Neither A nor B
Answer cannot be determined based on the information given.
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