The Dammon Corp. has the following investment opportunities: Machine AMachine BMachine C($10,000 cost)($22,500 cost)($35,500 cost)InflowsInflowsInflowsyear 1$6,000 year 1$12,000 year 1$-0- year 2 3,000 year 2 7,500 year 2 30,000 year 3 3,000 year 3 1,500 year 3 5,000 year 4 -0- year 4 1,500 year 4 20,000 Under the payback method and assuming these machines are mutually exclusive, which machine(s) would Dammon Corp. choose?

Payback period is time required to recover initial costs of PROJECT.

Answered: The Dammon Corp. has the following…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 18EB: Garnette Corp is considering the purchase of a new machine that will cost $342,000 and provide the...

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The Dammon Corp. has the following investment opportunities:

Machine A	Machine B	Machine C
($10,000 cost)	($22,500 cost)	($35,500 cost)
Inflows	Inflows	Inflows
year 1	$	6,000	year 1	$	12,000	year 1	$	-0-
year 2		3,000	year 2		7,500	year 2		30,000
year 3		3,000	year 3		1,500	year 3		5,000
year 4		-0-	year 4		1,500	year 4		20,000

Under the payback method and assuming these machines are mutually exclusive, which machine(s) would Dammon Corp. choose?

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