Question

In: Finance

Stenson, Inc., imposes a payback cutoff of three years for its international investment projects. Assume the...

Stenson, Inc., imposes a payback cutoff of three years for its international investment projects. Assume the company has the following two projects available.
Year Cash Flow A Cash Flow B
0 –$ 47,000 –$ 92,000     
1 18,000      20,000     
2 24,200      25,000     
3 20,000      34,000     
4 6,000      248,000     

What is the payback period for each project (A and B in years)?

Solutions

Expert Solution


Related Solutions

Global Toys, Inc., imposes a payback cutoff of three years for its international investment projects. Assume...
Global Toys, Inc., imposes a payback cutoff of three years for its international investment projects. Assume the company has the following two projects available. Year Cash Flow A Cash Flow B 0 –$ 64,000      –$ 109,000      1 26,500      28,500      2 34,400      33,500      3 28,500      25,500      4 14,500      231,000      Requirement 1: What is the payback period for each project? (Do not round intermediate calculations. Round your answers to 2 decimal places (e.g., 32.16).) Payback period   Project A years     Project B...
Bronco, Inc., imposes a payback cutoff of three years for its international investment projects.    Year...
Bronco, Inc., imposes a payback cutoff of three years for its international investment projects.    Year Cash Flow (A) Cash Flow (B) 0 –$ 54,000 –$ 64,000 1 20,000 12,000 2 22,000 15,000 3 18,000 20,000 4 5,000 224,000    What is the payback period for both projects? (Round your answers to 2 decimal places, e.g., 32.16.)
Buy Coastal, Inc., imposes a payback cutoff of 3 years for its international investment projects. Suppose...
Buy Coastal, Inc., imposes a payback cutoff of 3 years for its international investment projects. Suppose the company has the following two projects available. Project A has payback period of years, while project B has a payback period of years. Therefore, it should project A and project B. (Round your answers to 3 decimal places. (e.g., 32.162)) Year Cash Flow (A) Cash Flow (B) 0 −$43,000 −$59,000 1 21,000 10,000 2 31,000 16,000 3 10,000 26,000 4 2,000 268,000 References
An investment under consideration has a payback of eight years and a cost of $868,000. Assume...
An investment under consideration has a payback of eight years and a cost of $868,000. Assume the cash flows are conventional.    If the required return is 10 percent, what is the worst-case NPV?
Find out the NPV, IRR and Payback period for each of the following three projects. Assume...
Find out the NPV, IRR and Payback period for each of the following three projects. Assume I=6%.                                                                                                                                    (60 points) Project CF0 CF1 CF2 CF3 CF4 CF5 A -12,000 3000 3000 4000 4000 1000 B -12,000 4000 4000 3000 3000 1000 C -12,000 3000 3000 3000 3000 1000 D -12,000 5000 3000 5000 3000 0 E -12,000 3000 3000 3000 3000 5000 F -12,000 0 0 6000 6000 6000
Find out the NPV, IRR and Payback period for each of the following three projects. Assume...
Find out the NPV, IRR and Payback period for each of the following three projects. Assume I=6%. Please show work and write out answers. Do not put into a table. Thank you    Project CF0 CF1 CF2 CF3 CF4 CF5 A -12,000 3000 3000 4000 4000 1000 B -12,000 4000 4000 3000 3000 1000 C -12,000 3000 3000 3000 3000 1000 D -12,000 5000 3000 5000 3000 0 E -12,000 3000 3000 3000 3000 5000 F -12,000 0 0 6000...
If an investment proposal is accepted for implementation and its payback period period is 3 years...
If an investment proposal is accepted for implementation and its payback period period is 3 years out of 5, is it virtually certain that the project will have to support for the first few years with capital from sources other than the cash generated from the projects. what are the implications of this multiyear cash requirement for the management. Will the implications be same if a new company with no other projects in line is evaluating the same project.
Pharoah Manufacturing Co. is evaluating two projects. The company uses payback criteria of three years or...
Pharoah Manufacturing Co. is evaluating two projects. The company uses payback criteria of three years or less. Project A has a cost of $901,000, and project B’s cost is $1,268,100. Cash flows from both projects are given in the following table. Year Project A Project B 1 $86,212 $586,212 2 313,562 413,277 3 427,594 231,199 4 285,552 What are their discounted payback periods? (Round answers to 2 decimal places, e.g. 15.25. If discounted payback period exceeds life of the project,...
Evaluate the following projects using the payback method assuming a rule of 4 years for payback....
Evaluate the following projects using the payback method assuming a rule of 4 years for payback. Year Project A Project B 0. -10,000 -10,000 1. 4000 4000 2. 4000 3000 3. 4000 2000 4. 0. 1,000,000 A. Project A can be accepted because the payback period is 2.5 years but Project B cannot be accepted because its payback period is longer than 3 years. B. Project B should be accepted, since there is a $1,000,000 payoff in the 4th year...
Evaluate the following projects using the payback method assuming a rule of 3 years for payback....
Evaluate the following projects using the payback method assuming a rule of 3 years for payback. Year Project A Project B 0 -10,000 -10,000 1 4,000 4,000 2 4,000 3,000 3 4,000 2,000 4 0 1,000,000
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT