How can a payback period approach be used to evaluate potential projects?
What will be an ideal response?
The project payback period approach estimates the amount of time that will be necessary to recoup the investment in a project; that is, how long will it take the project to pay back its initial budget and begin to generate positive cash flow for the company. The discounted cash flow method is used to estimate cash outlays and inflows resulting from investment in a project, and these positive and negative flows are compared using the ratio:
Payback Period =
Shorter paybacks are preferable to longer paybacks.
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Which of the below offers a disadvantage for working virtually?
A. Increases in worker productivity B. Increases in feelings of seclusion C. Decreases in expenses for the company D. Alleviation of congested roadways
Trek Holidays Company signed a 9%, 10-year note for $154,000. The company paid an installment of $2,900 for the first month. What portion of the first monthly payment is principal? (Round your answer to the nearest whole number.)
A) $1,745 B) $4,645 C) $1,540 D) $15,733