1)
Cumulative cash flow for year 0 = -2300
Cumulative cash flow for year 1 = -2300 + 870 = -1,430
Cumulative cash flow for year 2 = -1,430 + 870 = -560
Cumulative cash flow for year 3 = -560 + 780 = 220
560 / 780 = 0.72
Payback period = 2 + 0.72 = 2.72 years
2)
Accepted as payback period is less than 4 years
Compute the payback statistic for Project A if the appropriate cost of capital is 7 percent...
Compute the payback statistic for Project A if the appropriate cost of capital is 7 percent and the maximum allowable payback period is four years. (Round your answer to 2 decimal places.) Project A Time: Cash flow: 0 -$2,300 1 $870 2 $870 3 $780 4 $560 5 $360 Payback years Should the project be accepted or rejected? accepted O rejected
Compute the payback statistic for Project A if the appropriate cost of capital is 8 percent and the maximum allowable payback period is four years. (Round your answer to 2 decimal places.) Project A Time: Cash flow: -$2,800 $1,070 $1,020 $889 $660 $460 Payback years Should the project be accepted or rejected? accepted rejected
Compute the discounted payback statistic for Project D if the appropriate cost of capital is 12 percent and the maximum allowable discounted payback is four years. (Do not round intermediate calculations and round your final answer to 2 decimal places. If the project does not pay back, then enter a "O" (zero).) Project D Time: Cash flow: 0 -$11,600 1 $3,410 $4,300 34 $1,640 $0 $1,120 Discounted payback period 0 years Should the project be accepted or rejected? accepted rejected...
Compute the discounted payback statistic for Project C if the appropriate cost of capital is 8 percent and the maximum allowable discounted payback period is three years. (Do not round intermediate calculations. Round your final answer to 2 decimal places.) Project C Time Cash flow -$1,300 $600 $570 $610 $360 $160 2 4 5 years Should the project be accepted or rejected? O Rejected O Accepted
Compute the discounted payback statistic for Project if the appropriate cost of capital is 8 percent and the maximum allowable discounted payback period is three years. (Do not round intermediate calculations and round your final answer to 2 decimal places.) Project t Timet Cash flow: -51,600 $720 $660 Discounted payback period Should the project be accepted or rejected accepted rejected
Compute the payback statistic for Project B if the appropriate cost of capital is 12 percent and the maximum allowable payback period is three years. (Round your answer to 2 decimal places. If the project never pays back, then enter a "0" (zero).) Project B Time: 0 1 2 3 4 5 Cash flow: –$11,300 $3,380 $4,240 $1,580 $0 $1,060 Payback years ___________ Should the project be accepted or rejected? ______________
Compute the payback statistic for Project B if the appropriate cost of capital is 12 percent and the maximum allowable payback period is three years. (If the project never pays back, then enter a "0" (zero).) Project B Time: Cash flow: -$11,000 $3,350 $4,130 $1,520 $0 $1,000 Payback years Should the project be accepted or rejected? accepted rejected
Compute the payback statistic for Project A if the appropriate cost of capital is 7 percent and the maximum allowable payback period is four years. (Round your answer to 2 decimal places.) Project A Time: S Cash flow: o $2,900 1 $1,110 2 $1,050 3 $900 4 $680 5 $480 Payback years
Compute the discounted payback statistic for Project C if the appropriate cost of capital is 6 percent and the maximum allowable discounted payback period is three years. (Do not round intermediate calculations. Round your final answer to 2 decimal places.) Project C Time Cash flow -$2,700 $1,160 $990 $1,030 $640 $440 0 2 4 Discounted payback period years Should the project be accepted or rejected? Rejected Accepted
Compute the discounted payback statistic for Project D if the appropriate cost of capital is 13 percent and the maximum allowable discounted payback is four years. (Do not round intermediate calculations and round your final answer to 2 decimal places. If the project does not pay back, then enter a "O" (zero).) Project D Time: 2 4 Cash flow:-$11,500 $3,400 $4,280 $1,620 $0 $1,100 Discounted payback period years Should the project be accepted or rejected? O accepted O rejected