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

Question 33

Multiple Choice

The Dammon Corp.has the following investment opportunities:  Machine A  Machine B  Machine C ($15,000) ($22,500) ($37,500)  Inflows  Inflows  Inflows  year 1 $6,000$12,000$0 year 2 9,00012,00030,000 year 3 3,00010,50030,000 year 4 010,50015,000 year 5 0015,000\begin{array}{rrrr}&\text { Machine A } & \text { Machine B } & \text { Machine C } \\&(\$ 15,000) & (\$ 22,500) & (\$ 37,500) \\& \text { Inflows } & \text { Inflows } & \text { Inflows } \\\text { year 1 } & \$ 6,000 & \$ 12,000 & \$-0- \\\text { year 2 } & 9,000 & 12,000 & 30,000 \\\text { year 3 } & 3,000 & 10,500 & 30,000 \\\text { year 4 } & -0- & 10,500 & 15,000 \\\text { year 5 } & -0- & -0- & 15,000\end{array} Under the payback period and assuming these machines are mutually exclusive,which machine(s) would Dammon Corp.choose?


A) Machine A
B) Machine B
C) Machine C
D) None of the machines will be accepted.

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