The American Pharmaceutical Company (APC) has a policy that all capital investments must have a five-year or less discounted payback period in order to be considered for funding. The MARR at APC is 9% per year. Is the above project able to meet this benchmark for funding? What is the payback period? To Find PDiscrete Compounding; /=9%Single PaymentCompoundAmountFactorTo Find FPresentWorth FactorCompoundUniform SeriesPresentWorth FactorSinkingAmountFactorFundFactorCapitalRecoveryTo Find FTo Find PTo Find AGiven PGiven FGiven AGiven AGiven FFactorTo Find AGiven PNFIPPIFFIAPIAAIFAIP11.09000.91741.00000.91741.00001.0900231.18810.84172.09001.75910.47850.568531.29500.77223.27812.53130.30510.395141.41160.70844.57313.23970.21870.308751.53860.64995.98473.88970.16710.257161.67710.59637.52334.48590.13290.222971.82800.54709.20045.03300.10870.198781.99260.501911.02855.53480.09070.180792.17190.460413.02105.99520.07680.1668102.36740.422415.19296.41770.06580.1558112.58040.387517.56036.80520.05690.1469122.81270.355520.14077.16070.04970.1397133.06580.326222.95347.48690.04360.1336143.34170.299226.01927.78620.03840.1284153.64250.274529.36098.06070.03410.1241 End of Year0123456-10Cash Flow- $270,000- $35,000$60,000$190,000$230,000$360,000$95,000

Payback period is defined as the amount of time it takes for an investment to generate enough cash…

Answered: Is the above project able to meet this…

Business

Economics

Is the above project able to meet this benchmark for funding? What is the payback period?

ECON MICRO

5th Edition

ISBN:9781337000536

Author:William A. McEachern

Publisher:William A. McEachern

Chapter13: Capital, Interest, Entrepreneurship, And Corporate Finance

Section: Chapter Questions

Problem 4.8P

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Question

The American Pharmaceutical Company (APC) has a policy that all capital investments must have a five-year or less discounted payback period in order to be considered for funding. The MARR at APC is 9% per year. Is the above project able to meet this benchmark for funding? What is the payback period?

To Find P
Discrete Compounding; /=9%
Single Payment
Compound
Amount
Factor
To Find F
Present
Worth Factor
Compound
Uniform Series
Present
Worth Factor
Sinking
Amount
Factor
Fund
Factor
Capital
Recovery
To Find F
To Find P
To Find A
Given P
Given F
Given A
Given A
Given F
Factor
To Find A
Given P
N
FIP
PIF
FIA
PIA
AIF
AIP
1
1.0900
0.9174
1.0000
0.9174
1.0000
1.0900
23
1.1881
0.8417
2.0900
1.7591
0.4785
0.5685
3
1.2950
0.7722
3.2781
2.5313
0.3051
0.3951
4
1.4116
0.7084
4.5731
3.2397
0.2187
0.3087
5
1.5386
0.6499
5.9847
3.8897
0.1671
0.2571
6
1.6771
0.5963
7.5233
4.4859
0.1329
0.2229
7
1.8280
0.5470
9.2004
5.0330
0.1087
0.1987
8
1.9926
0.5019
11.0285
5.5348
0.0907
0.1807
9
2.1719
0.4604
13.0210
5.9952
0.0768
0.1668
10
2.3674
0.4224
15.1929
6.4177
0.0658
0.1558
11
2.5804
0.3875
17.5603
6.8052
0.0569
0.1469
12
2.8127
0.3555
20.1407
7.1607
0.0497
0.1397
13
3.0658
0.3262
22.9534
7.4869
0.0436
0.1336
14
3.3417
0.2992
26.0192
7.7862
0.0384
0.1284
15
3.6425
0.2745
29.3609
8.0607
0.0341
0.1241

End of Year
0
1
234
5
6-10
Cash Flow
- $270,000
- $35,000
$60,000
$190,000
$230,000
$360,000
$95,000

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