Nicholson Roofing? Materials, Inc...solved

Nicholson Roofing? Materials, Inc...solved

Nicholson Roofing? Materials, Inc., is considering two mutually exclusive? projects, each with an initial investment of ?$140,000. The? company’s board of directors has set a? 4-year payback requirement and has set its cost of capital at 7%. The cash inflows associated with the two projects are shown in the following? table: Cash inflows ?(CFt?) Year Project A Project B 1 ?$40,000 $75,000 2 $40,000 ?$70,000 3 $40,000 $20,000 4 ?$40,000 ?$20,000 5 ? $40,000 ?$20,000 6 ?$40,000 ?$20,000 a. Calculate the payback period
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