Question: Evaluate the following projects using the payback method assuming a rule of 3 years for payback. Year 0 1 2 3 4 Project A -10000
Evaluate the following projects using the payback method assuming a rule of 3 years for payback. Year 0 1 2 3 4 Project A -10000 4,000 4,000 4,000 0 Project B -10,000 4,000 3,000 2000 1,000,000 o Project A can be accepted because the payback period is 25 years but Project B cannot be accepted because its payback period is longer than 3 years. Project B should be accepted because even thought the payback period is 2.5 years for project A and 3.001 project B, there is a $1,000,000 payoff in the 4th year in Project B. Project B should be accepted because you get more money paid back in the long run. Both projects can be accepted because the payback is less than 3 years
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