-Table 10.1 shows the cash flows and discounted cash flows for three mutually exclusive projects available to a company.Assume an interest rate of 5%.Which project should the company choose if they want to recover their initial investment as soon as possible?
A) Project A
B) Project B
C) Project C
D) Cannot be determined

Question

-Table 10.1 shows the cash flows and discounted cash flows for three mutually exclusive projects available to a company.Assume an interest rate of 5%.Which project should the company choose if they want to recover their initial investment as soon as possible?
A) Project A 
B) Project B 
C) Project C 
D) Cannot be determined

Quizplus · Accepted Answer

Project A has the shortest payback period of 2 years, which means it will recover its initial investment the soonest.

-Table 101 Shows the Cash Flows and Discounted Cash Flows for for Three