Question: Mathew Inc is debating using the payback period versus the
Mathew Inc. is debating using the payback period versus the discounted payback period for small-dollar projects. The company's information officer has submitted a new computer project with a $15,000 cost. The cash flow will be $5,000 each year for the next five years. The cutoff period used by the company is three years. The information officer states that it doesn't matter which model the company uses for the decision; the project is clearly acceptable. Demonstrate for the information officer that the selection of the model does matter.
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