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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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Check the following consideration

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$96,000

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Production  26,000 units

<u>Materials Purchase Budget</u>

Production Materials Required  (5×26,000 units)     130,000

Add Budgeted Closing Materials (50,000×20%×5)   50,000

Total Materials                                                             180,000

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Training can be defined as a learning process which typically involves teaching an individual or group of people skills that are relevant to their job position or roles in an organization.

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