Page 342 - F2 - MA Integrated Workbook STUDENT 2018-19
P. 342
Chapter 14
Test your understanding 4
DER are considering two projects. Both cost $450,000 and only one may be
undertaken. DER use the payback method for appraising investments and
require payback within three years.
The details of the cash flows for the two projects are:
Year Project A Project B
$000 $000
1 200 50
2 150 120
3 100 190
4 50 310
5 20 260
Advise DER which project they should undertake.
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