Kara, Incorporated, imposes a payback cutoff of three years for its international investment projects. Assume the company has the following two projects available. Year Cash Flow (A) 0 1 2 3 4 -$ 60,000 24,500 32,000 26,500 12,500 Cash Flow (B) -$ 105,000 a. Project A Project B b. Project acceptance 26,500 31,500 27,500 235,000 a. What is the payback period for each project? Note: Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16. b. Which, if either, of the projects should the company accept? years years
Kara, Incorporated, imposes a payback cutoff of three years for its international investment projects. Assume the company has the following two projects available. Year Cash Flow (A) 0 1 2 3 4 -$ 60,000 24,500 32,000 26,500 12,500 Cash Flow (B) -$ 105,000 a. Project A Project B b. Project acceptance 26,500 31,500 27,500 235,000 a. What is the payback period for each project? Note: Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16. b. Which, if either, of the projects should the company accept? years years
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter19: Capital Investment
Section: Chapter Questions
Problem 22E
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