Project H Requires an Initial Investment of $100,000 and Produces

question 13

Multiple Choice

Project H requires an initial investment of $100,000 and produces annual cash flows of $50,000, $40,000, and $30,000. Project T requires an initial investment of $100,000 and the produces annual cash flows of $30,000, $40,000, and $50,000. The projects are mutually exclusive. The company accepts projects with payback periods of 3 years or less.

• A) Project H will be accepted.
• B) Project T will be accepted.
• C) H and T will both be accepted.
• D) Neither projected will be accepted.