Global Toys, Inc. imposes a three-year payback cutoff for international investment projects.Let's assume the company has the
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Question:
Global Toys, Inc. imposes a three-year payback cutoff for international investment projects. Let's assume the company has the following two projects.
Year | Cash Flow A | Cash Flow B | ||
0 | –$ | 61.000 | –$ | 106.000 |
1 | 25.000 | 27.000 | ||
2 | 32.600 | 32.000 | ||
3 | 27.000 | 27.000 | ||
4 | 13.000 | 234.000 | ||
What is the payback period for each project? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g. 32.16.)
repayment period | |
Project A | year |
Project B | year |
Which project(s), if any, should the company accept?
Related Book For
Essentials of Corporate Finance
ISBN: 978-1259277214
9th edition
Authors: Stephen Ross, Randolph Westerfield, Bradford Jordan
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