Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. i have the correct answers, just have a question r

I have the correct answers, just have a question regarding payback-- Why is payback for...

80.2K

Verified Solution

Question

Finance

I have the correct answers, just have a question regarding payback-- Why is payback for project A 2 years +(#) / (#) and payback for project B is 1 year + (#) / (#). I guess I'm confused on when I use year 2 vs year 1 for calculating payback A firm has a WACC of 13% and is deciding between two mutually exclusive projects. Project A has an initial investment of $65. The additional cash flows for Project A are the following: Year 1 = $16, Year 2 = $35, and Year 3 = $62. Project B has an initial investment of $74. The cash flows for Project B are as follows: Year 1 = $51, Year 2 = $46, and Year 3 = $33. Calculate the payback and NPV for each project. (Show all answers to two decimals.) Payback for A = 2.23 years Payback for B = 1.50 years NPV for A = $19.54 NPV for B = $30.03

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Chemistry
1.2K views

Consider the titration of 30.0 mL of 0.0700 M (CH3)2NH (a weak base; Kb = 0.000540)...

Mechanical Engineering
1.2K views

A compressor, operating at steady-state, increases the pressure of an air stream from 1 bar to...

General Management
1.2K views

What is amazon's global and corporate strategy? Critically appraise both the chosen internationalization strategy and its execution Explain...

Physics
1.2K views

My and My denote the atomic masses of the parent and the daughter nuclei respectively...

Basic Math
1.2K views

0 O Area of a Trap Example 1 The dimensions of a trapezoid are shown...

Basic Math
1.2K views

A b 3 13 50 points Find the exact value tan 30 sin 45 a...

Basic Math
1.2K views

Graph the linear equation. f(x) = -(1/3)x.Use the graphing tool to graph the equation.

Accounting
1.2K views

Suppose the European Union (EU) was investigated and proposed a merger between two of the...

Accounting
1.2K views

Hello, Can you quickly help me which Accounting principles in these 4 sentences 1. Recording...

Accounting
1.2K views

In its first month of operations, Coronado Company made three purchases of merchandise in the...

Accounting
1.2K views

Whitman Company has just completed its first year of operations. The companys absorption costing income...

Accounting
1.2K views

Snyder's-Lance manufactures, markets, and distributes a variety of snack food products including pretzels, sandwich crackers,...