Suppose that another couple of proposals is submitted for capital allocation. They have the following cash inflows:
|
Year
|
Proposal 1($)
|
Proposal 2($)
|
|
I
|
10,000
|
5,500
|
|
2
|
10,500
|
5,500
|
|
3
|
4,200
|
5,500
|
|
4
|
1,900
|
5,500
|
|
5
|
1,580
|
5,500
|
Make a capital budgeting decision based on the payback period criteria if both projects require a $25,000 initial investment.