Carolina Logistics,Inc.is considering three investment opportunities with the following payback periods: $$\begin{array} { | l | c | c | c | }
\hline & \text { Project } X & \text { Project } Y & \text { Project } Z \
\hline\text { Payback period } & 3 \text { years } & 2.5 \text { years } & 2.8 \text { years } \
\hline
\end{array}$$ Use the decision rule for payback to rank the projects from most desirable to least desirable,all else being equal.

Question

Carolina Logistics,Inc.is considering three investment opportunities with the following payback periods: $$\begin{array} { | l | c | c | c | } 
\hline & \text { Project } X & \text { Project } Y & \text { Project } Z \
\hline\text { Payback period } & 3 \text { years } & 2.5 \text { years } & 2.8 \text { years } \
\hline
\end{array}$$ Use the decision rule for payback to rank the projects from most desirable to least desirable,all else being equal.

Quizplus · Accepted Answer

The decision rule for payback is to prefer projects with shorter payback periods. Project Y has the shortest payback period, followed by Project Z, and then Project X.

Carolina Logistics,Inc Use the Decision Rule for Payback to Rank the Projects