It's January, and five friends have asked to borrow $500 to buy a limited-edition Dungeons & Dragons
Question:
It's January, and five friends have asked to borrow $500 to buy a limited-edition Dungeons & Dragons game. Each says they can pay you back some money over the first few months of the year even adding a bit more out of appreciation. Here's how much they can pay back over the first few months:
Mike: $100 in February, $200 in March, $250 in April
Dustin: $50 in February, $250 in March, $300 in April
Lucas: $75 in February, $325 in March, $175 in April
Will: $250 in February, $250 in March, $20 in April
Max: $300 in February, $25 in March, $300 in April
If you were using the Payback Period Method of capital budgeting, which friend would you decide to loan the $500 to?
Foundations of Financial Management
ISBN: 978-1259024979
10th Canadian edition
Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen, Doug Short, Michael Perretta