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7.1 a. (5 points) Offshore Drilling Products, Inc, imposes a payback cutoff of three years...

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Accounting

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7.1 a. (5 points) Offshore Drilling Products, Inc, imposes a payback cutoff of three years for its international investment projects. If the company has the following two projects available, should it accept either of them? Year Cash Flow (A) Cash Flow (B) 0 $38,000 $70,000 20,000 15,000 19,000 20,000 15,000 30,000 4 5,000 200,000 b. (5 points) You're trying to determine whether or not to expand your business by building a new manufacturing plant. The plant has an installation cost of $15 million, which will be depreciated straight-line to zero over its three-year life. If the plant has projected net income of $1,800,000, $2,100,000, and $2,400,000 over these three years, what is the project's average accounting return (AAR)

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