Question: Explain your answer 3, Suppose that two projects each cost $12,000. The first project returns $4,000 per year for 6 years. The second proj- ect

Explain your answer 3, Suppose that two projects each cost $12,000. The first project returns $4,000 per year for 6 years. The second proj- ect returns $6,000 per year for 2 years. Which has the better payback period? Are there any issues with this method of analysis? Explain compounding and discounting. How much will $6,000 invested at 5% simple interest be worth in 3 years? What will it be worth if the interest rate is 790? 4. 5

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