Samuelson Electronics Has a Required Payback Period of Three Years

question 36

Multiple Choice

Samuelson Electronics has a required payback period of three years for all of its projects.Currently,the firm is analyzing two independent projects.Project A has an expected payback period of 2.8 years and a net present value of $6,800.Project B has an expected payback period of 3.1 years with a net present value of $28,400.Which projects should be accepted based on the payback decision rule?

• A)Project A only
• B)Project B only
• C)Both A and B
• D)Neither A nor B
• E)Answer cannot be determined based on the information given.

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Definitions:

Quality

The degree to which a good, service, or idea meets the demands and requirements of customers.

Operations

The day-to-day activities and tasks involved in running a business or organization, focusing on the creation and delivery of products or services.

Production

The process of creating goods and services from various resources, involving stages such as planning, designing, and manufacturing.