McKernan Inc. imposes a payback cutoff of three years for its international investment projects. The company has the following two projects Cash Flow Cash Flow (B) Year (A) 0 -$ 65,200 -$ 76,000 1 25,000 17,000 2 30,000 20,000 3 23,000 28,000 4 10,000 232,000 What is the payback period for both projects? (Round the final answers to 2 decimal places.) Project A Project B 2 Payback period years years Which project should the company accept? O Project A O Project B

Net present value is the most important concept of finance. It is used to evaluate the investment and financing decisions that involve cash flows occurring over multiple periods. The difference between the present value of cash inflow and cash outflow is…

The term investment refers to allocating money with the intention of getting positive returns in the future period. For example, an asset would be acquired with the motive of generating income by selling the asset when there is a price increase.

Capital investment analysis is a way of the budgeting process that companies and the government use to evaluate the profitability of the investment that has been done for the long term. This can include the evaluation of fixed assets such as machinery, e…

Capital budgeting is a decision-making process whereby long-term investments is evaluated and selected based on whether such investment is worth pursuing in future or not. It plays an important role in financial decision-making as it impacts the profitab…