Question

Asked Nov 20, 2019

6 views

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: | 0 | 1 | 2 | 3 | 4 | 5 |

Cash flow: | −$1,400 | $510 | $600 | $600 | $380 | $180 |

Payback years: _______.__

1 Rating

Step 1

**Calculation of Payback Period:**

The payback period is **2.48 years**.

The project should be **Accepted** since the payback of 2.48 years is less than the average payback of the company of 4 years.

**Excel Spr...**

Tagged in

Find answers to questions asked by student like you

Show more Q&A

Q: For the credit card account, assume one month between billing dates (with the appropriate number o...

A: Computation of the average daily balance:Hence, the average daily balance is $352.80.

Q: Guthrie Enterprises needs someone to supply it with 142,000 cartons of machine screwsper year to sup...

A: b.Calculation of Minimum Number of Cartons:The minimum number of cartons is 122,425 cartons per year...

Q: Suppose the risk of the company changes based on an unanticipated decrease in the Free Cash Flows by...

A: The present value is calculated today to determine the present value of future cashflows at the give...

Q: Assess the estimation techniques of long-term corporate investments, in your answer focus on the rel...

A: Investment valuation is done by estimating the present value of all the future cashflows which an in...

Q: Topic: Payout Policy What are the drawback(s) of distributing dividends instead of retained earnings...

A: The dividend policy is a decision in deciding the exchange between paying dividends and retaining ea...

Q: Dexter International is expected to pay a dividend next year of $2.10 per share. Dexter has a beta o...

A: Calculation of dividend yield:Answer:Dividend yield is 5.0%Meaning:Dividend yield is shown as a perc...

Q: A charge account had a balance of $979 on May 5. A purchase of $222 was made on May 17, and a paymen...

A: From May 5 to May 17, the balance of account is $979 for 12 days.From May 17 to May 20 the balance o...

Q: How do firms use current liabilities, including accounts payable, accruals, lines of credit, commerc...

A: Current liabilities are the short-term liabilities or financial obligations which are expected to pa...

Q: A specialty concrete mixer used in construction was purchased for $300,000 7 years ago. Its annual O...

A: Computation of EUAC of existing and new mixer using insider's view point approach:Hence, the EUAC of...