I. VDSL Company has two mutually exclusive projects. Below is a
table representing the initial investment...
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I. VDSL Company has two mutually exclusive projects. Below is atable representing the initial investment and cash flows for theseprojects over four (4) years.
Project A Project B Year Cash Flow Cash Flow $ $ 0 -750,000-750,000 1 250,000 200,000 2 350,000 400,000 3 250,000 100,000 4200,000 175,000 If the company wishes to recover the investment in2.5 years, calculate the payback period of each project anddetermine which project is the best investment.
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Payback Period for the PROJECTA Year Cash Flows Cumulative net Cash flow 0 750000 750000 1 250000 500000 2 350000 150000 3 250000 100000 4
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