document.write( "<A HREF=/cgi-bin/jump-to-question.mpl?question=1157712>Question 1157712</A>: <I><SPAN STYLE=\"word-break: break-all;\"> Below are the estimated cash flows for two projects: S and L. The WACC is 10%.\r<BR>\n" );
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document.write( "Time           0 | 1  |  2  |  3  |<BR>\n" );
document.write( "Project L    -100| 10 |  60 | 80  |<BR>\n" );
document.write( "Project S    -100| 70 |  50 | 20  |\r<BR>\n" );
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document.write( "1) What is the payback period? Find the paybacks for Projects L and S.\r<BR>\n" );
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document.write( "2) What is the rationale for the payback method? According to the payback criterion, which project(s) should be accepted if the firm’s maximum acceptable payback is 2 years, if Projects L and S are independent?  If Projects L and S are mutually exclusive? \r<BR>\n" );
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document.write( "3) What is the difference between the regular and discounted payback methods? What is Project L’s discounted payback, assuming a 10% cost of capital?  </SPAN>\n" );
document.write( "</I><HR><TABLE width=100%><TR><TD><B><A HREF=http://www.algebra.com/>Algebra.Com's</A> Answer #780580 by </B><A HREF=/tutors/aboutme.mpl?userid=ikleyn><B>ikleyn(52793)</B></A><img src=\"/images/stars/stars-13.gif\" alt=\"\" >&nbsp;<A HREF=/tutors/aboutme.mpl?userid=ikleyn><IMG SRC=http://www.algebra.com/images/aboutme-small.gif BORDER=0 alt=\"About Me\" VALIGN=MIDDLE></A>&nbsp;<IMG SRC=http://www.algebra.com/cgi-bin/show-face.mpl?user=ikleyn><BR>You can <A HREF=\"/cgi-bin/embed-solution.mpl?show=1&solution=780580\">put this solution on YOUR website!</A><BR><SPAN STYLE=\"word-break: break-all;\"> .\r<BR>\n" );
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document.write( "Hey,\r<BR>\n" );
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document.write( "consulting in accounting is not our specialization.\r<BR>\n" );
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document.write( "This problem is far from the profile of this forum.\r<BR>\n" );
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document.write( "Have a nice day (!)\r<BR>\n" );
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document.write( " </SPAN>\n" );
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