What are the payback periods of projects E and F in the following table: Cash Flow E F Cost 44,000 95,000 Cash flow year 1 11,000 38,000 Cash flow year 2 11,000 28,500 Cash flow year 3 11,000 19,000 Cash flow year 4 11,000 9,500 Cash flow year 5 11,000 0 Cash flow year 6 11,000 0 Assume all the cash flow is evenly spread throughout the year. If the cutoff period is 3 years, which project(s) do you accept? What is the payback period for project?
What are the payback periods of projects E and F in the following table: Cash Flow E F Cost 44,000 95,000 Cash flow year 1 11,000 38,000 Cash flow year 2 11,000 28,500 Cash flow year 3 11,000 19,000 Cash flow year 4 11,000 9,500 Cash flow year 5 11,000 0 Cash flow year 6 11,000 0 Assume all the cash flow is evenly spread throughout the year. If the cutoff period is 3 years, which project(s) do you accept? What is the payback period for project?
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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What are the payback periods of projects E and F in the following table:
Cash Flow E F
Cost 44,000 95,000
Cash flow year 1 11,000 38,000
Cash flow year 2 11,000 28,500
Cash flow year 3 11,000 19,000
Cash flow year 4 11,000 9,500
Cash flow year 5 11,000 0
Cash flow year 6 11,000 0
Assume all the cash flow is evenly spread throughout the year. If the cutoff period is 3 years, which project(s) do you accept? What is the payback period for project?
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