Question: Consider the following three projects. All three have an initial investment of $ 400,000 $400,000. Requirements 1. Determine the payback period of each project. Rank
Consider the following three projects. All three have an initial investment of $ 400,000
$400,000.
Requirements
1.
Determine the payback period of each project. Rank the projects from most desirable to least desirable based on payback.
2.
Are there other factors that should be considered in addition to the paybackperiod?
Project L
Project M
Project N
Year
Annual
Accumulated
Annual
Accumulated
Annual
Accumulated
1
$
50,000
$
50,000
$
100,000
$
100,000
$
200,000
$
200,000
2
50,000
100,000
200,000
300,000
200,000
400,000
3
50,000
150,000
100,000
400,000
4
50,000
200,000
200,000
600,000
5
50,000
250,000
250,000
850,000
6
50,000
300,000
7
50,000
350,000
8
50,000
400,000
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