Quattro, Inc. has the following mutually exclusive projects available. The company has historically used a four-year cutoff for projects. The required return is 11 percent.   Year Cash Flow (A) Cash Flow (B) 0 −$50,000 −$60,000 1 6,000 7,000 2 9,000 12,000 3 20,000 22,000 4 25,000 20,000 The payback for Project A is ____ while the payback for Project B is ____. The NPV for Project A is _____ while the NPV for Project B is ____. Which project, if any, should the company accept?

Financial And Managerial Accounting
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ISBN:9781337902663
Author:WARREN, Carl S.
Publisher:WARREN, Carl S.
Chapter26: Capital Investment Analysis
Section: Chapter Questions
Problem 2CMA: Staten Corporation is considering two mutually exclusive projects. Both require an initial outlay of...
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Quattro, Inc. has the following mutually exclusive projects available. The company has historically used a four-year cutoff for projects. The required return is 11 percent.
 

Year Cash Flow (A) Cash Flow (B)
0 −$50,000 −$60,000
1 6,000 7,000
2 9,000 12,000
3 20,000 22,000
4 25,000 20,000


The payback for Project A is ____ while the payback for Project B is ____. The NPV for Project A is _____ while the NPV for Project B is ____. Which project, if any, should the company accept? 

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