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taurus [48]
3 years ago
6

Atlantis Inc. is considering two mutually exclusive projects with the following cash flows: Year 0 1 2 3 4 Project A ($120,000)

$60,000 $40,000 $60,000 $80,000 Project B ($100,000) $60,000 $50,000 $0 $0 If Atlantis accepts projects that pay back in two years or less, which should be undertaken?

Business
1 answer:
boyakko [2]3 years ago
3 0

Answer:

Project b

Explanation:

The cash payback period calculates how long the amount invested in a project would be recouped from its cummulative cash flows.

Project b should be taken because the amount invested would be recouped in 1.8 years which is less than the 2 years benchmark.

The amount invested in project A would be gotten back in 2.3 years which is greater than the 2 years benchmark. This makes project A unacceptable.

Please find explanations on how this answer was derived in the attached images.

I hope my answer helps you

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deferral is the answer.

A deferral in accrual accounting is an account on which income or expenses are recorded at a later date. Pensions, surcharges, taxes, income, etc. Accruals and deferrals can be viewed as either assets or liabilities, depending on the type of accrual. See also boundaries.

deferral means money paid or received before the product or service is offered. Here is an example of postponement: Insurance fee. Subscription-based services (newspapers, magazines, TV shows, etc.) Prepaid rental.

deferral is a payment made in one accounting period but not reported until the next accounting period. For example, if you made a payment at the end of the year but did not report until the new year, this will be postponed.

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