Mountain Manufacturing is considering the following capital investment proposals. Mountain’s

Mountain Manufacturing is considering the following capital investment proposals. Mountain€™s requirement criteria include a maximum payback period of five years and a required rate of return of 12.5%. Determine if each investment is acceptable or should be rejected (ignore qualitative factors). Rank the acceptable investments in order from most desirable to least desirable.
Mountain Manufacturing is considering the following capital investment proposals. Mountain€™s
Payback Period
Payback period method is a traditional method/ approach of capital budgeting. It is the simple and widely used quantitative method of Investment evaluation. Payback period is typically used to evaluate projects or investments before undergoing them,...


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Project Payback NPV IRR Profitability Index 5.00 years 3.25 years $10,250 42,226 (10,874) 36,251 14.0% 2.86 3.15 years 4.20 years 2.00 years 5 0 12.5% 1.00 13.0% 14.2% 8.5% 1.54 1.92 0.75