he chart below shows the initial investment and expected yearly payback for Project A and Project B     Project A Project B Initial Investment  $      300,000  $      450,000 Expected Yearly PayBack  $        45,000  $        90,000   What is the Payback Period for Project A and Project B? What is the average ROI for Project A and Project B?  Which Project should be chosen?

Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter12: Capital Budgeting: Decision Criteria
Section: Chapter Questions
Problem 10P: Project S has a cost of $10,000 and is expected to produce benefits (cash flows) of $3,000 per year...
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The chart below shows the initial investment and expected yearly payback for Project A and Project B

 

 

Project A

Project B

Initial Investment

 $      300,000

 $      450,000

Expected Yearly PayBack

 $        45,000

 $        90,000

 

What is the Payback Period for Project A and Project B?

What is the average ROI for Project A and Project B? 

Which Project should be chosen? 

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