Discounted payback period of project a discounted payback

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Crane Manufacturing Co. is evaluating two projects. The company uses payback criteria of three years or less. Project A has a cost of $1,072,640, and project B's cost is $1,128,800. Cash flows from both projects are given in the following table.

Year Project A Project B

1 $86,212 $586,212

2 313,562 413,277

3 427,594 231,199

4 285,552

What are their discounted payback periods? (Round answers to 2 decimal places, e.g. 15.25. If discounted payback period exceeds life of the project, enter 0.00 for the answer.)

Discounted payback period of project A Discounted payback period of project B

Which will be accepted with a discount rate of 8 percent?

Crane should choose:

A) Project B

B) neither project

C) Project A

D) Both projects

Reference no: EM132382989

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