Payback method-mutually exclusive


The Dammon Corp. has the following investment opportunities

Machine A Machine B Machine C

($15,00) ($22,500) ($37,500)

inflows inflows inflows

yr 1 $6,000 yr1 $ 12,000 yr1 $0

yr2 $9,000 yr2 12,000 yr 2 30,000

yr3 $3,000 yr3 10,500 yr3 30,000

yr4 0 yr 4 10,500 yr4 15,000

yr5 0 yr 5 0 yr 5 15,000

Under the payback method and assuming these machines are mutually exclusive, which machines would Dammon Corp. choose?

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Microeconomics: Payback method-mutually exclusive
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