Q1) What is Reed's cost of not taking suppliers' discounts?
Caledonia is thinking two additional mutually exclusive projects. Cash flows associated with these projects are given below:
YEAR
|
PROJECT A
|
PROJECT B
|
0
|
$100,000
|
$100,000
|
1
|
32,000
|
0
|
2
|
32,000
|
0
|
3
|
32,000
|
0
|
4
|
32,000
|
0
|
5
|
32,000
|
$200,000
|
Required rate of return on these projects is 11 percent.
Determine each project's payback period?