Project A as well as project B require an initial investment of $1,050,000, have a 6-year life, and have expected total cash inflows of $1,680,000.Proposal A is expected to provide an annual net cash inflow of $280,000, while the annual net cash inflows for Proposal B are as follows:
$$\begin{array} { l l }
\text { Year 1 } & \$ 350,000 \
\text { Year 2 } & \$ 315,000 \
\text { Year 3 } & \$ 280,000 \
\text { Year 4 } & \$ 280,000 \
\text { Year 5 } & \$ 245,000 \
\text { Year 6 } & \$ 210,000
\end{array}$$
Determine the cash payback period for each proposal.

Question

Project A as well as project B require an initial investment of $1,050,000, have a 6-year life, and have expected total cash inflows of $1,680,000.Proposal A is expected to provide an annual net cash inflow of $280,000, while the annual net cash inflows for Proposal B are as follows:
​ $$\begin{array} { l l } 
\text { Year 1 } & \$ 350,000 \
\text { Year 2 } & \$ 315,000 \
\text { Year 3 } & \$ 280,000 \
\text { Year 4 } & \$ 280,000 \
\text { Year 5 } & \$ 245,000 \
\text { Year 6 } & \$ 210,000
\end{array}$$ ​
Determine the cash payback period for each proposal.

Quizplus · Accepted Answer

The Answer of Project A as well as project B require an initial investment of $1,050,000, have a 6-year life, and have expected total cash inflows of $1,680,000.Proposal A is expected to provide an annual net cash inflow of $280,000, while the annual net cash inflows for Proposal B are as follows:
​ $$\begin{array} { l l } 
\text { Year 1 } & \$ 350,000 \
\text { Year 2 } & \$ 315,000 \
\text { Year 3 } & \$ 280,000 \
\text { Year 4 } & \$ 280,000 \
\text { Year 5 } & \$ 245,000 \
\text { Year 6 } & \$ 210,000
\end{array}$$ ​
Determine the cash payback period for each proposal.

Project a as Well as Project B Require an Initial