Elsyian Fields ,Inc., uses a maximum payback period of 6 years and currently must choose between two mutually exclusively projects. Project Hydrogen requires an initial outlay of BD 25000, project Helium requires an initial outlay of BD35000. Using the expected cash inflows given for each project in the following table.

Expected cash flow
Year	Hydrogen	Helium
1	BD6000	BD7000
2	BD6000	BD8000
3	BD8000	BD8000
4	BD4000	BD6000
5	BD4500	BD5000
6	BD2000	BD6000

Required:

3. Explain why one of the projects is the better choice than the other.

Answer rating: 100% (QA)

Payback period is the number of years taken by the cash inflows to reear... View the full answer