Question

In: Finance

If management requires a 3 year payback period, which project would you choose?

(Chapter 11 payback period)

year

Proj A

Proj B

Proj C

0

        (1,000)

        (10,000)

        (5,000)

1

              600

             5,000

          1,000

2

              300

             3,000

          1,000

3

              200

             3,000

          2,000

4

              100

             3,000

          2,000

5

              500

             3,000

          2,000
  1. If management requires a 3 year payback period, which project would you choose?
  1. If the discount rate is 12% and management still requires a 3 year pay back on a discounted basis, which project would you choose?

 

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jeff jeffy answered 3 years ago
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