The Dammon Corp. has the following investment opportunities:
$\begin{array}{cccrr}
\text { Machine A } && \text { Machine B } && \text { Machine C } \
(\$ 10,000 \operatorname{cost})&&(\$ 22,500 \operatorname{cost})&&(\$ 35,500 \operatorname{cost})\
\text { Inflows }&&\text { Inflows }&&\text { Inflows }\
\text { year 1 } & \$ 6,000 & \text { year } 1 & \$ 12,000 & \text { year 1 } &\%-0-\
\text { year 2 } & 3,000 & \text { year 2 } & 7,500 & \text { year 2 }&30,000 \
\text { year 3 } & 3,000 & \text { year 3 } & 1,500 & \text { year 3 } &5,000\
\text { year 4 } & -0- & \text { year 4 } & 1,500 & \text { year 4 }&20,000
\end{array}$
Under the payback method and assuming these machines are mutually exclusive, which machine(s) would Dammon Corp. choose?

Question

Quizplus · Accepted Answer

Machine A has the shortest payback period, recovering its cost in 2 years, making it the preferred choice under the payback method.

The Dammon Corp Under the Payback Method and Assuming These Machines Are Mutually