Calculate the Payback Period for Each of the Following Projects

question 62

Essay

Calculate the payback period for each of the following projects, then comment on the advisability of selection based on the payback period criterion in contrast to NPV: Project A has a cost of $15,000, returns $4,000 after-tax the first year and this amount increases by $1,000 annually over the five-year life; Project B costs $15,000 and returns $13,000 after-tax the first year, followed by four years of $2,000 per year.The firm uses a 10 percent discount rate.
B.So payback can seriously underestimate a Project's contribution to business wealth, as illustrated in its contrasting results to that of NPV.
Payback_A:
years
Payback_B:

Differentiate between contracts that must be in writing under the statute of frauds and those that do not.

Identify exceptions to the statute of frauds, including the main purpose or leading object rule.

Recognize the significance of written evidence in proving contractual obligations.

Understand the role and requirements of the parol evidence rule in contract interpretation.

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Definitions:

Job Demands

The physical, psychological, social, or organizational aspects of a job that require sustained physical or mental effort.

Growth Need Strength

An individual's desire for personal development, particularly in the context of their professional life or work environment.

Moderating Variable

A variable that affects the nature of the relationship between an independent and a dependent variable such that the relationship depends on the level of the moderating variable.

Task Variety

The degree to which a job encompasses a variety of different activities requiring different skills and talents.