Lee Enterprises accepts capital investment projects with a payback period of five years or less.Under this condition,which of the following projects would be acceptable?
$\begin{array}{rr}
&\text { Project \#1 }&\text { Project \#2 }\
\text { Annual cash flows }&\$ 25000 & \$ 40000 \
\text { Initial investment }&125000&160000
\end{array}$

Question

Quizplus · Accepted Answer

Both projects have a payback period of less than five years, which meets the condition for capital investment projects accepted by Lee Enterprises. Therefore, both Project #1 and Project #2 are acceptable investment options for the company.

Lee Enterprises Accepts Capital Investment Projects with a Payback Period