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nignag [31]
3 years ago
9

P9-17 Comparing Investment Criteria [LO1, 2, 3, 5, 7] Consider the following two mutually exclusive projects: Year Cash Flow (A)

Cash Flow (B) 0 –$221,117 –$16,136 1 27,200 5,520 2 60,000 8,304 3 60,000 13,962 4 425,000 9,960 Whichever project you choose, if any, you require a 6 percent return on your investment. a. What is the payback period for Project A?
Mathematics
1 answer:
Rzqust [24]3 years ago
3 0

Answer:

3.17 YEARS

Step-by-step explanation:

Payback calculates the amount of time it takes to recover the amount invested in a project from it cumulative cash flows

Payback period = Amount invested / cash flow

Payback period for option A, Product A  

Amount invested = –$221,117

Amount recovered in year 1 = –$221,117 + 27,200 = -193,917

Amount recovered in year 2 =  -193,917 + 60,000 = -133,917

Amount recovered in year 3 = -133,917 + 60,000 = -73,917

Amount recovered in year 4 =  -73,917 + 425,000 = 351,083

Payback period = 3 years + (73,917 / 425,000) = 3.17 years

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Answer:

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Step-by-step explanation:

You are being asked to read the coordinates of several points from the graph. Each set of coordinates is an (x, y) pair, where the first coordinate is the horizontal distance to the right of the y-axis, and the second coordinate is the vertical distance above the x-axis. The distances are measured according to the scales marked on the x- and y-axes.

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<h3>Vertex</h3>

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<h3>X-intercepts</h3>

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<em>Additional comment</em>

The reminder that these are "points" is to ensure that you write both coordinates as an ordered pair. We know the x-intercepts have a y-value of zero, for example, so there is a tendency to identify them simply as x=2 and x=4. This problem statement is telling you to write them as ordered pairs.

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