Question: Timeline Manufacturing Co. is evaluating two projects. The company uses payback criteria of three years or less. Project A has a cost of $845,140, and

Timeline Manufacturing Co. is evaluating two projects. The company uses payback criteria of three years or less. Project A has a cost of $845,140, and project Bs cost is $1,190,400. Cash flows from both projects are given in the following table.

Year Project A Project B
1 $86,212 $586,212
2 313,562 413,277
3 427,594 231,199
4 285,552

What are their discounted payback periods? (Round answers to 2 decimal places, e.g. 15.25. If discounted payback period exceeds life of the project, enter 0.00 for the answer.)

Discounted payback periods of project A

Discounted payback periods of project B

Which will be accepted with a discount rate of 8 percent?

Timeline should choose

Project Aneither projectProject BBoth projects

.

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!