Question: Elyas Fields, Inc., uses a maximum payback period of 6 years, and currently must choose between two mutually exclusive projects. Project Hydrogen requires an initial
Elyas Fields, Inc., uses a maximum payback period of 6 years, and currently must choose between two mutually exclusive projects. Project Hydrogen requires an initial outlay of US$25,000; project Helium requires an initial outlay of US$35,000. Using the expected cash inflows given for each project in the follow- ing table, calculate each project's payback period. Which project meets Elyas' standards?
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Expected cash inflows Year Hydrogen Helium 1 2 USS6,000 US$7,000 7,000 8,000 5,000 5,000 4,000 6,000 8,000 4,000 3,500 2,000
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