Question

The projects P and Q have same initial cash outflow of $4,000 each. The opportunity cost of capital to discount the cash flows is 10%. The following are the cash inflows for each project. Year Project P Project Q 1 $3,000 0 2 $1,000 $4,000 3 $1,000 $1,000 4 $1,000 $2,000 Calculate the simple payback period and discounted payback period for each project. (a) The simple payback period for Project P and Project Q is 2 years and 2 years respectively and discounted payback period for Project P and Project Q is 2.6 years and 2.9 years respectively. (b) The simple payback period for Project P and Project Q is 2 years and 3 years respectively and discounted payback period for Project P and Project Q is 2.9 years and 2.6 years respectively. (c) The simple payback period for Project P and Project Q is 3 years and 2.5 years respectively and discounted payback period for Project P and Project Q is 3.6 years and 2.6 years respectively. (d) The simple payback period for Project P and Project Q is 2 years and 2 years respectively and discounted payback period for Project P and Project Q is 2.9 years and 2.6 years respectively.

          The projects P and Q have same initial cash outflow of $4,000 each. The opportunity cost of capital to discount the cash flows is 10%. The following are the cash inflows for each project.

Year Project P Project Q
1 $3,000 0
2 $1,000 $4,000
3 $1,000 $1,000
4 $1,000 $2,000

Calculate the simple payback period and discounted payback period for each project.

(a) The simple payback period for Project P and Project Q is 2 years and 2 years respectively and discounted payback period for Project P and Project Q is 2.6 years and 2.9 years respectively.
(b) The simple payback period for Project P and Project Q is 2 years and 3 years respectively and discounted payback period for Project P and Project Q is 2.9 years and 2.6 years respectively.
(c) The simple payback period for Project P and Project Q is 3 years and 2.5 years respectively and discounted payback period for Project P and Project Q is 3.6 years and 2.6 years respectively.
(d) The simple payback period for Project P and Project Q is 2 years and 2 years respectively and discounted payback period for Project P and Project Q is 2.9 years and 2.6 years respectively.

The projects P and Q have same initial cash outflow of 4,000 each. The opportunity cost of capital to discount the cash flows is 10%. The following are the cash inflows for each project.

Year Project P Project Q
13,000 0
2 1,0004,000
3 1,0001,000
4 1,0002,000

Calculate the simple payback period and discounted payback period for each project.

(a) The simple payback period for Project P and Project Q is 2 years and 2 years respectively and discounted payback period for Project P and Project Q is 2.6 years and 2.9 years respectively.
(b) The simple payback period for Project P and Project Q is 2 years and 3 years respectively and discounted payback period for Project P and Project Q is 2.9 years and 2.6 years respectively.
(c) The simple payback period for Project P and Project Q is 3 years and 2.5 years respectively and discounted payback period for Project P and Project Q is 3.6 years and 2.6 years respectively.
(d) The simple payback period for Project P and Project Q is 2 years and 2 years respectively and discounted payback period for Project P and Project Q is 2.9 years and 2.6 years respectively.

Added by Eric L.

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