Suppose your firm is considering two mutually exclusive,required projects with the cash flows shown as follows.The required rate of return on projects of both of their risk class is 8 percent,and the maximum allowable payback and discounted payback statistic for the projects are two and three years,respectively. Use the discounted payback decision rule to evaluate these projects; which one(s)should be accepted or rejected?
A) Accept both A and B
B) Accept neither A nor B
C) Accept A, reject B
D) Reject A, accept B

Question

Suppose your firm is considering two mutually exclusive,required projects with the cash flows shown as follows.The required rate of return on projects of both of their risk class is 8 percent,and the maximum allowable payback and discounted payback statistic for the projects are two and three years,respectively.  Use the discounted payback decision rule to evaluate these projects; which one(s)should be accepted or rejected?
A) Accept both A and B 
B) Accept neither A nor B 
C) Accept A, reject B 
D) Reject A, accept B

Quizplus · Accepted Answer

11ea8218_291d_1820_bbd8_3f12317f4ceb_TB1326_00 1 + (10,740.74/25,720.16) = 1.42 years
 11ea8218_291d_1821_bbd8_6713fc62b4a8_TB1326_00 2 + (3,593.96/39,691.61) = 2.09 years

Suppose Your Firm Is Considering Two Mutually Exclusive,required Projects with the Cash