Question: 1. Project A Project B Time 0 -10,000 -5,000 Time 1 4,000 3,000 Time 2 3,000 2,000 Time 3 10,000 2,000 If WiseGuy Inc. uses
1.
|
| Project A | Project B |
| Time 0 | -10,000 | -5,000 |
| Time 1 | 4,000 | 3,000 |
| Time 2 | 3,000 | 2,000 |
| Time 3 | 10,000 | 2,000 |
If WiseGuy Inc. uses payback period rule to choose projects, which of the projects (Project A or Project B) will rank highest?
a) Project A
b) Project B
c) Project A and B have the same ranking
d) Cannot calculate a payback period without a discount rate
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