Canada Golf Club (CGC) is considering three independent projects for July 2021 tournament. The three projects are project A, project B and project C. Given the following cash flow information, calculate the payback period for each. If CGC requires a 3-year payback before an investment can be made, which project(s) would be accepted YEAR PROJECT A PROJECT B PROJECT C INVEST (0) -2000 -10000 -5000 1 -2000 -6000 -2000 2 800 4000 5000 3 600 3000 5000 4 600 2000 5000 5 400 2000 2000
Canada Golf Club (CGC) is considering three independent projects for July 2021 tournament. The three projects are project A, project B and project C. Given the following cash flow information, calculate the payback period for each. If CGC requires a 3-year payback before an investment can be made, which project(s) would be accepted YEAR PROJECT A PROJECT B PROJECT C INVEST (0) -2000 -10000 -5000 1 -2000 -6000 -2000 2 800 4000 5000 3 600 3000 5000 4 600 2000 5000 5 400 2000 2000
Chapter11: Capital Budgeting And Risk
Section: Chapter Questions
Problem 8P
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Canada Golf Club (CGC) is considering three independent projects for July 2021 tournament. The
three projects are project A, project B and project C. Given the following cash flow information,
calculate the payback period for each. If CGC requires a 3-year payback before an investment
can be made, which project(s) would be accepted
YEAR | PROJECT A | PROJECT B | PROJECT C |
INVEST (0) | -2000 | -10000 | -5000 |
1 | -2000 | -6000 | -2000 |
2 | 800 | 4000 | 5000 |
3 | 600 | 3000 | 5000 |
4 | 600 | 2000 | 5000 |
5 | 400 | 2000 | 2000 |
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