Question: Consider the following three projects. All three have an initial investment of $1,000,000. Data Table: Net Cash Inflows Project L Project M Project N Year
Consider the following three projects. All three have an initial investment of $1,000,000.
Data Table:
Net Cash Inflows
Project L
Project M
Project N
Year
Annual
Accumulated
Annual
Accumulated
Annual
Accumulated
1
$125,000
$125,000
$175,000
$175,000
$500,000
$500,000
2
125,000
250,000
275,000
450,000
500,000
1,000,000
3
125,000
375,000
550,000
1,000,000
4
125,000
500,000
650,000
1,650,000
5
125,000
625,000
750,000
2,400,000
6
125,000
750,000
7
125,000
875,000
8
125,000
1,000,000
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 payback period? |
Requirement 1. Determine the payback period of each project. Rank the projects from most desirable to least desirable based on payback. (Enter the payback period as anumeral.)
| Project | Payback period | |
|
|
| years |
|
|
| years |
|
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| years |
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