Sunland Manufacturing Co. is evaluating two projects. The company uses payback criteria of three years...
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Finance
Sunland Manufacturing Co. is evaluating two projects. The company uses payback criteria of three years or less. Project A has a cost of $1,131,840, and project Bs cost is $1,315,000. Cash flows from both projects are given in the following table.
Year
Project A
Project B
1
$86,212
$586,212
2
313,562
413,277
3
427,594
231,199
4
285,552
What are their discounted payback periods? (Round answers to 2 decimal places, e.g. 15.25. If discounted payback period exceeds life of the project, enter 0.00 for the answer.)
Discounted payback period of project A
Discounted payback period of project B
Which will be accepted with a discount rate of 8 percent?
Sunland should choose ______
Answer & Explanation
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