The square box is considering two independent projects, both of which have an initial cost of $18,000. the cash inflows of project a are $3,000, $7,000, and $10,000 over the next three years, respectively. the cash inflows for project b are $3,000, $7,000, and $15,000 over the next three years, respectively. the required return is 12 percent and the required discounted payback period is 3 years. based on discounted payback, which project(s), if either, should be accepted

The Square Box should accept Project B only

Explanation:

Square Box should decide the project whose Net present value (NPV) of future cash inflow is higher than the initial cost of investment

NPV of cash inflow from Project A = 3,000/(1+12%)+7,000/(1+12%)^2+10,000/(1+12%)^3 = $15,377, lower then initial cost of $18,000 → deny Project A

NPV of cash inflow from Project B = 3,000/(1+12%)+7,000/(1+12%)^2+15,000/(1+12%)^3 = $18,936, higher then initial cost of $18,000 → accept Project B

answer: technology

hope i

-lavira: )

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