A company produces two boat models,Montauk and Orient.Both products are being considered for major investment projects next year.Relevant data follow:
$$\begin{array}{lrr}
&\underline{\text{Montauk }}&\underline{\text{Orient }}\
\text{New investment}&\$ 424,000&\$ 380,000\
\text{Expected 3-year net cash flows:}\
\text{Year 1}&150,000&130,000\
\text{Year 2}&160,000&130,000\
\text{Year 3}&170,000&130,000
\end{array}
$$
Required:
Use the payback period to evaluate these two investment projects.

Question

A company produces two boat models,Montauk and Orient.Both products are being considered for major investment projects next year.Relevant data follow:
 $$\begin{array}{lrr}
&\underline{\text{Montauk }}&\underline{\text{Orient }}\
\text{New investment}&\$ 424,000&\$ 380,000\
\text{Expected 3-year net cash flows:}\
\text{Year 1}&150,000&130,000\
\text{Year 2}&160,000&130,000\
\text{Year 3}&170,000&130,000
\end{array}
$$ 
Required:
Use the payback period to evaluate these two investment projects.

Quizplus · Accepted Answer

The Answer of A company produces two boat models,Montauk and Orient.Both products are being considered for major investment projects next year.Relevant data follow:
 $$\begin{array}{lrr}
&\underline{\text{Montauk }}&\underline{\text{Orient }}\
\text{New investment}&\$ 424,000&\$ 380,000\
\text{Expected 3-year net cash flows:}\
\text{Year 1}&150,000&130,000\
\text{Year 2}&160,000&130,000\
\text{Year 3}&170,000&130,000
\end{array}
$$ 
Required:
Use the payback period to evaluate these two investment projects.

A Company Produces Two Boat Models,Montauk and Orient Required: Use the Payback Period to Evaluate These Two Investment

A Company Produces Two Boat Models,Montauk and Orient Required:
Use the Payback Period to Evaluate These Two Investment