Evaluate the following projects using the payback method assuming ...

[berenicecastro]

Evaluate the following projects using the payback method assuming a rule of 3 years for payback.
 
  Year Project A Project B
  0 -10,000 -10,000
  1 4,000 4,000
  2 4,000 3,000
  3 4,000 2,000
  4 0 1,000,000
 
  A) Project A can be accepted because the payback period is 2.5 years but Project B cannot be accepted because it's payback period is longer than 3 years.
  B) Project B should be accepted because even though the payback period is 2.5 years for Project A and 3.001 for project B, there is a 1,000,000 payoff in the 4th year in Project B.
  C) Project B should be accepted because you get more money paid back in the long run.
  D) Both projects can be accepted because the payback is less than 3 years.

Question 2

Institutional investors are professional investors who work on behalf of individuals, business, and government.
 
  Indicate whether the statement is true or false

[Sweetkitty24130]

Answer to Question 1

A

Answer to Question 2

TRUE