Question: Part 2 . CASE PROBLEM Q3. Read, analyze and use the best method to makeefficient capital investment decisions. Kara, Incorporated, imposes a payback cutoff of

Part 2 . CASE PROBLEM

Q3. Read, analyze and use the best method to makeefficient capital investment decisions.

Kara, Incorporated, imposes a payback cutoff of three years for its international investment projects.

Part 2 . CASE PROBLEM Q3. Read, analyze and use the best

a. What is the payback period for both projects?(Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)

b. Which project should the company accept? Why?

Year Cash Flow (A) Cash Flow (B) 0 $ 58,000 -$ 68,000 1 22,000 14,000 2 26,000 17,000 3 20,000 24,000 4 7,000 228,000

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