Find the payback period for both projects


Buy Coastal, Inc., imposes a payback cutoff of three years for its international investment projects.

Year

Cash Flow (A)

 

Cash Flow (B)

0

-$

64,000

 

 

-$

74,000

 

1

 

25,000

 

 

 

17,000

 

2

 

32,000

 

 

 

20,000

 

3

 

23,000

 

 

 

30,000

 

4

 

10,000

 

 

 

234,000

 

What is the payback period for both projects?

Which project should the company accept?

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Finance Basics: Find the payback period for both projects
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