Problem: The Dammon Corp. has the following investment opportunities.
|
Year
|
Machine A Inflows
($15,000 investment)
|
Machine B Inflows
($22,500 investment)
|
Machine C Inflows
($37,500 investment)
|
|
1
|
$6,000
|
$12,000
|
$-0-
|
|
2
|
9,000
|
12,000
|
30,000
|
|
3
|
3,000
|
10,500
|
30,000
|
|
4
|
-0-
|
10,500
|
15,000
|
|
5
|
-0-
|
-0-
|
15,000
|
Under the payback method and assuming these machines are mutually exclusive, which machine(s) would Dammon Corp. choose?
- Machine A
- Machine B
- Machine C
- Machine A and B