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 payback period decision rule suggests that the project with the shortest payback period is the most desirable. Therefore, Project Y (2.5 years) is most desirable, followed by Project Z (2.8 years), and Project X (3 years) is the least desirable.

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