The Dammon Corp. has the following investment opportunities:

Machine A				Machine B				Machine C
($10,000 cost)				($22,500 cost)				($35,500 cost)
Inflows				Inflows				Inflows
year 1	$	6,000		year 1	$	12,000		year 1	$	-0-
year 2		3,000		year 2		7,500		year 2		30,000
year 3		3,000		year 3		1,500		year 3		5,000
year 4		-0-		year 4		1,500		year 4		20,000

Under the payback method and assuming these machines are mutually exclusive, which machine(s) would Dammon Corp. choose?

Answer rating: 100% (QA)

The payback period is the amount of time it takes for an investment to recover its initial cost The ... View the full answer