Question: Discounted payback: Timeline Manufacturing Co. management is evaluating two projects. The company uses payback criteria of three years or less. Project A has a cost
Discounted payback: Timeline Manufacturing Co. management is evaluating two projects. The company uses payback criteria of three years or less. Project A has a cost of $1,912,855, and project Bs cost is $1,875,000. Cash flows from both projects are given in the following table. What are their discounted payback periods, and which will be accepted with a discount rate of 8 percent?
| Year | Project A | Project B |
| 1 | $ 186,212 | $516,212 |
| 2 | 393,562 | 613,277 |
| 3 | 497,594 | 731,199 |
| 4 | 485,552 |
|
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