International investment projects

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Global Toys, Inc., imposes a payback cutoff of three years for its international investment projects. Assume the company has the following two projects available.

Year Cash Flow A           Cash Flow B

0 –$ 56,000                       –$ 101,000

1 22,500                                 24,500

2 29,600                                 29,500

3 24,500                                29,500

4 10,500                                239,000

Requirement 1: What is the payback period for each project? (Do not round intermediate calculations. Round your answers to 2 decimal places (e.g., 32.16).)

Payback period Project A ________ years          Project B___________ years              

Requirement 2: Should it accept either of them? (Click to select)

Accept project B and reject project A_____

Reject both projects A and B________

Accept project A and reject project B__________

Accept both projects A and B________

Reference no: EM131016160

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