Question:
Offshore Drilling Products, Inc., imposes a payback cutoff of three years for its international investment projects. If the company has the following two projects available, should it accept either of them?
| Year |
Cash Flow (A) |
Cash Flow (B) |
| 0 |
(38,000.00) |
(70,000.00) |
| 1 |
16,000.00 |
10,000.00 |
| 2 |
19,000.00 |
15,000.00 |
| 3 |
18,000.00 |
20,000.00 |
| 4 |
5,000.00 |
250,000.00 |