Canada Golf Club (CGC) is considering three independent projects for July 2021 tournament. The three projects are project A, project B and project C. Given the following cash flow information, calculate the exact payback period for each eventhough some may appear outside of the 3 year period. If CGC requires a 3-year payback before an investment can be made, which project(s) would be accepted? Year Project A ($) Project B ($) Project C ($) 0 (Investment) -2,000 -$10,000 -$5,000 1 -2,000 -6,000 -2,000 2 800 4,000 5,000 3 600 3,000 5,000 4 600 2,000 5,000 5 400 2,000 2,000
Canada Golf Club (CGC) is considering three independent projects for July 2021 tournament. The three projects are project A, project B and project C. Given the following cash flow information, calculate the exact payback period for each eventhough some may appear outside of the 3 year period. If CGC requires a 3-year payback before an investment can be made, which project(s) would be accepted? Year Project A ($) Project B ($) Project C ($) 0 (Investment) -2,000 -$10,000 -$5,000 1 -2,000 -6,000 -2,000 2 800 4,000 5,000 3 600 3,000 5,000 4 600 2,000 5,000 5 400 2,000 2,000
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Canada Golf Club (CGC) is considering three independent projects for July 2021 tournament. The three projects are project A, project B and project C. Given the following cash flow information,
- calculate the exact payback period for each eventhough some may appear outside of the 3 year period.
- If CGC requires a 3-year payback before an investment can be made, which project(s) would be accepted?
|
Year |
Project A ($) |
Project B ($) |
Project C ($) |
|
0 (Investment) |
-2,000 |
-$10,000 |
-$5,000 |
|
1 |
-2,000 |
-6,000 |
-2,000 |
|
2 |
800 |
4,000 |
5,000 |
|
3 |
600 |
3,000 |
5,000 |
|
4 |
600 |
2,000 |
5,000 |
|
5 |
400 |
2,000 |
2,000 |
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