b) Answer partsi and i based on the information below: Project C has the following cash flows. Years 1 3 4 5 Cashflows -$75,000 $13,000 $19,000 $22,000 $25,000 $26,000

Fundamentals Of Financial Management, Concise Edition (mindtap Course List)
10th Edition
ISBN:9781337902571
Author:Eugene F. Brigham, Joel F. Houston
Publisher:Eugene F. Brigham, Joel F. Houston
Chapter16: Financial Planning And Forecasting
Section: Chapter Questions
Problem 2P: AFN EQUATION Refer to Problem 16-1. What additional funds would be needed if the companys year-end...
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b) Answer parts i and ii based on the information below:
Project C has the following cash flows.
Years
1
2
3
5
Cashflows
-$75,000
$13,000
$19,000
$22,000
$25,000
$26,000
Transcribed Image Text:b) Answer parts i and ii based on the information below: Project C has the following cash flows. Years 1 2 3 5 Cashflows -$75,000 $13,000 $19,000 $22,000 $25,000 $26,000
i.
Calculate the payback period in years for Project C. Round your answer to two decimal places.
ii. Project D has a payback period of 3.35 years. The investor uses a threshold of 3.5 years for decision
making. If Project C and Project D are mutually exclusive proiects, which project should be accepted
using the payback period method? Provide your reasons. (:
Transcribed Image Text:i. Calculate the payback period in years for Project C. Round your answer to two decimal places. ii. Project D has a payback period of 3.35 years. The investor uses a threshold of 3.5 years for decision making. If Project C and Project D are mutually exclusive proiects, which project should be accepted using the payback period method? Provide your reasons. (:
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