On this second question: ( only need help in part a and b) part A, how do I find how long it will take for Bill to recoup his initial investment in project A? part b) for bill to recoup his initial investment in project B, ( round to two decimal places)
Payback comparisons Nova Products has a 4—year maximum acceptable payback period. The ﬁrm is considering
the purchase of a new machine and must choose between two attematives. The ﬁrst machine requires an initial investment of $1B,ﬂﬂﬂ and generates annual aer—tax cash inﬂows of $4,ﬂl]l] for each of the next ‘11 years. The second
machine requires an initial investment of $21.ﬂﬂﬂ and provides an annual cash inﬂow after taxes of 551%] for 313 years. a. Determine the payback period for each machine.
b. Comment on the acceptability of the machines. assuming that they are independent projects. 1:. Which machine should the ﬁrm accept? Why?
d. Do the machines in this problem illustrate any of the weaknesses of using payback?