Consider the following two mutually exclusive projects, each of which require an initial investment of Tk. 100,000 and have no salvage value. This organization, which has a cost of capital of 15%, must choose one or the other.
| Year | Project A | Project B |
| 1 | Tk. 10,000 | 20,000 |
| 2 | 20,000 | 40,000 |
| 3 | 30,000 | 30,000 |
| 4 | 40,000 | 20,000 |
| 5 | 50,000 | 10,000 |
Compute the payback period of these two projects. Using the payback. criterion, which project is more desirable?
Consider the following two mutually exclusive projects, each of which require an initial investment of Tk. 100,000 and have no salvage value. This organization, which has a cost of capital of 15%, must choose one or the other.
| Year | Project A | Project B |
| 1 | Tk. 10,000 | 20,000 |
| 2 | 20,000 | 40,000 |
| 3 | 30,000 | 30,000 |
| 4 | 40,000 | 20,000 |
| 5 | 50,000 | 10,000 |
Compute the payback period of these two projects. Using the payback. criterion, which project is more desirable?
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