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bachelor in business administration
Polytechnic State University Sanluis
Jan-2006 - Nov-2010
CPA
Polytechnic State University
Jan-2012 - Nov-2016
Professor
Harvard Square Academy (HS2)
Mar-2012 - Present
The cash flows associated with three different projects are as follows:
|
Cash Flows |
Alpha |
Beta |
Gamma |
|
Initial flow |
-1.5 |
-0.4 |
-7.5 |
|
Yr 1 |
0.3 |
0.1 |
2.0 |
|
Yr 2 |
0.5 |
0.2 |
3.0 |
|
Yr 3 |
0.5 |
0.2 |
2.0 |
|
Yr 4 |
0.4 |
0.1 |
1.5 |
|
Yr 5 |
0.3 |
-0.2 |
5.5 |
A.) Calculate the payback period of each investment. B.) Which investment does the firm accept if the cutoff payback period is three years? Four years? C.) If the firm invests by choosing with the shortest payback period, which project would it invest in? D.) If the firm uses discounted payback with a 15% discount rate and a four-year cutoff period, which projects will it accept?
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