Timeline Manufacturing Co. is evaluating two projects. The company uses payback

Question

Timeline Manufacturing Co. is evaluating two projects. The company uses payback criteria of three years or less. Project A has a cost of $940,241, and project B

Explanation / Answer

Rate of return 8.00% Case -> A B Choose the project (feasibility)? Year Cash flow PV of cash flow Discounted Payback period Cash flow PV of cash flow Discounted Payback period 0 -940,241 $(940,241.00) -1,200,968 $(1,200,968.00) 1 86,212 $   79,825.93 586,212 $    542,788.89 2 313,562 $ 268,828.88 413,277 $    354,318.42 3 427,594 $ 339,437.90 231,199 $    183,533.22 4 28,552 $   20,986.57 0 $                 -   NPV NPV(A) $(231,161.72) 0.00 NPV(B) $   (120,327.48) 0.00 None since NPV

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