1 answer

Jimmy is considering a investing in a short-term project where he will pay $500 now and...

Question:

Jimmy is considering a investing in a short-term project where he will pay $500 now and get $12 back each week for 2 years. He decides he will do the project if he gets his money back within 1 year. Jimmy is using the      method and   .

Group of answer choices

Payback period method; should do the project.

Payback period method; should not do the project.

NPV method; should do the project.

NPV method; should not do the project.


Answers

Payback period method; should do the project.

Payback Period = 500/12

Payback period = 42 months

So,

Project should be accepted as payback period is less than 1 year.

.

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