A company is considering two projects. Project 1 has an initial investment of $60,000 and expected cash inflows of $20,000 each
year for 5 years. Project 2 has an initial investment of $80,000 and expected cash inflows of $20,000 each year for 10 years. Using the payback period as the evaluation method, which investment should be chosen by management?
A firm must be effectively organized to capture value. A firm has to ensure it has a properly ongoing work system where everything balances. Proper marketing and advert, viability in product quality, organized administrative and technical structuring, analysis on probable customer base etc., these and many more factors have to be critically looked into and worked on to gain competitive advantage. What is the competition doing right that we are missing? who are our competition? Why are they the peoples favorite? How can we become the peoples favorite? Questions of these sort if worked on and implemented, will facilitate effective organizational growth.
Productive projects mean people are benefitting from the projects, a counterproductive project would mean resources are being wasted and no one is benefiting. When property rights are well defined and enforced, businesses in a market economy will then have a strong incentive to undertake productive projects.
The cost of the room in dollars is obtained by multiplying the given value with the conversion. This is shown below, (€ 75) x ($1.298 / <span>€1) The numerical value of the operation above is $97.35. Therefore, the answer is letter C. $97.35. </span>
