lgalster4551 lgalster4551

04-11-2022
Business

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shell camping gear inc. is considering two mutually exclusive projects. each requires an initial investment (cf0) of $100,000. the president of the company has set a maximum payback periof of four years. the cash inflows associated with each project are shown below. cash inflows (cft) year project a project b 1 $10,000 $40,000 2 20,000 30,000 3 30,000 20,000 4 40,000 10,000 5 20,000 20,000 answer the following questions: 1. what is the payback period for each project? 2. which project should be accepted based on the payback rule? explain why one project is better than the other.

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