Problem

Calculating Payback. Offshore Drilling Products, Inc., imposes a payback cutoff of three y...

Calculating Payback. Offshore Drilling Products, Inc., imposes a payback cutoff of three years for its international investment projects. If the company has the following two projects available, should it accept either of them?

Year

Cash Flow (A)

Cash Flow (B)

0

−$45,000

$ 90,000

1

17,000

19,000

2

23,000

24,000

3

19,000

35,000

4

5,000

250,000

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