Please create two 5-year project cash flows with 68,500 TL and 98,600 TL initial investmentamounts by filling the missing parts of the table below.Project AProject BInitial InvestmentsYears68500 TL98.600 TLCash Flows137.0005.000210.0008.600312.00010.00045.50011.0004.00064.000a. According to the payback method which project would you prefer? Why? (19 pts)b. Please list three weak points of the payback method and briefly describe them. (5 pts)

Payback period is period required for recovery of initial investment.

Project A Project B Initial Investments Years 68500 TL 98.600 TL Cash Flows 37.000 5.000 8.600 10.000 11.000 64.000 1 10.000 12.000 5.500 4.000 3 4 According to the payback method which project would you prefer? Why? (19 pts)

Project A Project B Initial Investments Years 68500 TL 98.600 TL Cash Flows 37.000 5.000 8.600 10.000 11.000 64.000 1 10.000 12.000 5.500 4.000 3 4 According to the payback method which project would you prefer? Why? (19 pts)

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter12: Capital Budgeting: Decision Criteria

Section: Chapter Questions

Problem 10P: Project S has a cost of $10,000 and is expected to produce benefits (cash flows) of $3,000 per year...

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Concept explainers

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.

Question

100%

Please create two 5-year project cash flows with 68,500 TL and 98,600 TL initial investment
amounts by filling the missing parts of the table below.
Project A
Project B
Initial Investments
Years
68500 TL
98.600 TL
Cash Flows
1
37.000
5.000
2
10.000
8.600
3
12.000
10.000
4
5.500
11.000
4.000
64.000
a. According to the payback method which project would you prefer? Why? (19 pts)
b. Please list three weak points of the payback method and briefly describe them. (5 pts)

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