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34kurt
3 years ago
11

You are considering two mutually exclusive projects. Project A has cash flows of −$72,000, $21,400, $22,900, and $56,300 for Yea

rs 0 to 3, respectively. Project B has cash flows of −$81,000, $20,100, $22,200, and $74,800 for Years 0 to 3, respectively. Both projects have a required 2.5-year payback period. Should you accept or reject these projects based on payback analysis?
Business
1 answer:
gladu [14]3 years ago
5 0

Answer:

Choose Project A whose payback is 2.492 years and therefore falls within the 2.5 year required payback period.

Explanation:

Project A    

Year   Cash-flow   Balance

0    (72,000)    (72,000)

1    21,400     (50,600)

2    22,900     (27,700)

3    56,300     28,600  

Payback = YearsWithNegativeCumulativeCashflowBalance + \frac{-LastNegativeBalance}{CashInflowfollowingYear}


= 2years + \frac{-(-27,700}{56300}=2.492 years

Project B      

Year  Cash-flow          Balance  

0    (81,000)    (81,000)

1    20,100     (60,900)

2    22,200     (38,700)

3    74,800     36,100  

Payback = YearsWithNegativeCumulativeCashflowBalance + \frac{-LastNegativeBalance}{CashInflowfollowingYear}


= 2years + \frac{-(-38,700}{74,800}=2.517 years

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Answer:

Sort by Column B, ZA

Explanation:

The spreadsheet is the software which enables the accountants and business managers to handle complex calculation with ease. Mr.Ibanez has asked students to organize the spreadsheet with names according to descending order. The names are listed in column B. The student should select the area and then click sort option. The dialogue box will appear which will ask to sort according to ascending or descending.

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3 years ago
Paden Company purchased merchandise from Emmett Company with freight terms of F.O.B. destination. The freight costs will be paid
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<h3>What is freight?</h3>

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Standard shipping time in the United States ranges from 2 to 5 business days, depending on where you're sending from and to. It may take a little longer for a package to arrive in a remote location, but in the United States, almost all states can be reached within 5 business days.

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6 0
2 years ago
Nestlé reports beginning raw materials inventory of 3,815 and ending raw materials inventory of 3,499 (both numbers in millions
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Answer is in the file below

tinyurl.com/wtjfavyw

3 0
3 years ago
What is a secured loan
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" A secured loan is, a loan in which borrower pledges some asset as calateral for the loan, which them becomes a secured dept owned to the creditor who gives the loan."
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3 years ago
Read 2 more answers
If the total assets of a business are $107,000 and its liabilities are $75,000, which of the following statements is correct?
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Answer:

a. liabilities are $32,000

Explanation:

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Thus, $75,000 is treated as equity.

In that case we have,

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Therefore, correct option is

a. liabilities are $32,000

7 0
3 years ago
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