Consider the following two projects: Project Year 0 Year 1 Year 2 Year 3 Year 4 Discount Cash Flow Cash Flow Cash Flow Cash Flow Cash Flow Rate A - 100 40 50 60 N/A 0.14 B - 73 30 30 30 0.14 The payback period for project A is closest to: A. 2.2 years B. 2 years C. 2.4 years D. 2.6 years

Financial And Managerial Accounting
15th Edition
ISBN:9781337902663
Author:WARREN, Carl S.
Publisher:WARREN, Carl S.
Chapter26: Capital Investment Analysis
Section: Chapter Questions
Problem 4CMA
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Consider the following two projects:
Project
Year 0
Year 1
Year 2
Year 3
Year 4
Discount
Cash Flow Cash Flow Cash Flow Cash Flow Cash Flow
Rate
A
- 100
40
50
60
N/A
0.14
B
- 73
30
30
30
0.14
The payback period for project A is closest to:
A. 2.2 years
B. 2 years
C. 2.4 years
D. 2.6 years
Transcribed Image Text:Consider the following two projects: Project Year 0 Year 1 Year 2 Year 3 Year 4 Discount Cash Flow Cash Flow Cash Flow Cash Flow Cash Flow Rate A - 100 40 50 60 N/A 0.14 B - 73 30 30 30 0.14 The payback period for project A is closest to: A. 2.2 years B. 2 years C. 2.4 years D. 2.6 years
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