Question: 1. Study the table below. a. What is the payback period for Project X? CAPITAL EXPENDITURE DATA FOR PROJECT X (3 marks) Initial Investment Expected

1. Study the table below. a. What is the payback period

1. Study the table below. a. What is the payback period for Project X? CAPITAL EXPENDITURE DATA FOR PROJECT X (3 marks) Initial Investment Expected Cash Inflows Year 2 Year 3 Year 4 R2 000,00 R2 000,00 R5 000,00 Year 1 R1 000,00 R10 000,00 Year 5 R2 000,00 b. Now assume the company wants to select between Project X and Project Y, of which the latter has a payback period of three years and 10 months. Which project should be selected? The initial investment remains the same for both projects. Explain. (4 marks)

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