Question

Why
is payback often used as the sole method of analyzing a proposed
small project?

Answer #1

Also small projects may have a small period life, so payback leads
to a similar accep tor reject decision as IRR or NPV analysis

You are analyzing a proposed project and have compiled the
following information: Year 0: -$145,000; Year 1: $ 33,400; Year 2:
$ 70,500; Year 3: $ 82,100; Required return: 9.50 percent. What is
the Payback period for proposed project?

MS Project is often used to track a project. Does it outline
risk? Why or why not?

In your homework for Chapter 9, you used the following
techniques for analyzing projects:
Payback Rule
Discounted Payback Period
Net Present Value
Internal Rate of Return
Why must corporate managers use multiple techniques of
project evaluation? Which technique is most commonly used and
why? Describe several ways you may be able to use the techniques
above as you progress in your professional career. (Identify
specific types of projects you could analyze and discuss the
advantages and disadvantages of using the...

The payback period for a project is often calculated and then a
decision about undertaking the project is made after comparing this
calculated payback period to a target payback period. Select all
characteristics that apply to the target payback period.
The target payback period:
is usually determined by management.
can be expressed as a range of acceptable periods.
is irrelevant if the payback period for the project is less
than three years.
is a number calculated as a fixed percentage...

1(a). (TRUE or FALSE?) We calculate the payback period for a
proposed project by adding a project’s positive cash flows, one
period at a time, until the sum equals the initial investment.
1(b). (TRUE or FALSE?) When evaluating proposed projects with
the IRR method, those projects with IRRs that are greater than the
required rate of return are rejected.
1(c). (TRUE or FALSE?) If the project’s IRR is greater than or
equal to the hurdle rate (discount rate), the project...

Winston Hardware is analyzing a proposed project that requires
an initial investment of $39,900 for fixed assets and $9,900 for
net working capital. The project is expected to produce operating
cash flows of $11,400 a year for 4 years. The net working capital
can be recouped at the end of the project. The fixed assets have an
estimated aftertax salvage value of $16,900. Should this project be
accepted if the required rate of return is 13.9 percent? Why or why...

Why are the payback and discounted payback measures often
calculated when we know they are inferior to other methods in the
capital budgeting process? Explain fully.

Why are the payback and discounted payback measures often
calculated when we know they are inferior to other methods in the
capital budgeting process? Explain fully.

You are analyzing a capital project. It passes the Payback
threshold of your company. So, if the accounting rate of return
exceeds the companies’ required rate of return, you would
recommend:
A) invest in the capital asset.
B) do not invest in the capital asset.
C) only invest if the payback period is also greater than the
required rate of return.
D) only invest if the payback period is also less than the
required rate of return.

HC organization is analyzing when a proposed investment will
break even assuming the cash flow of each year 12,000,
5,000,5,000,2,500, and 1,000 over the next 5 years.the initial
investment is 22,000.
using the discounted payback period method when will the
organization break even? 5% cost of capital. Do in excel

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