Jimmy is considering a investing in a short-term project where he will pay $500 now and...
Jimmy is considering a investing in a short-term project where he will pay $500 now and get $12 back each week for 2 years. He decides he will do the project if he gets his money back within 1 year. Jimmy is using the method and .
Group of answer choices
Payback period method; should do the project.
Payback period method; should not do the project.
NPV method; should do the project.
NPV method; should not do the project.
Homework Answers
Payback period method; should do the project.
Payback Period = 500/12
Payback period = 42 months
So,
Project should be accepted as payback period is less than 1 year.
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