Problem #4

I 13 $8,000 Calculating Payback [LO2] Siva, Inc., imposes a payback cutoff of three years for its international investment projects. If the company has the following two projects available, should it accept either of them? Cash Flow (A) Year 0 Cash Flow (B) $45,000 16,000 21,000 15,000 9,000 -$55,000 2 3 4 13,000 15,000 24,000 255,000 Calculating Discounted Payback [LO3] An investment project has annual cash in- flows of $2,800, $3,700, $5,100, and $4,300, for the next four years, respectively. The discount rate is 14 percent. What is the discounted payback period for these cash flows if the initial cost is $5,200? What if the initial cost is $5,400? What if it is $10,400? 4