Net Cash Flow Determinations
Two new software projects are proposed to a young start up company. The Alpha Project will cost $150,000 to develop and is expected to have an annual net cash flow of $40,000. The Beta Project will cost $200,000 to develop and is expected to have an annual cash flow of $50,000. The company is very concerned about their cash flow. Using the payback period, which project is better from a cash flow standpoint? Why?© SolutionLibrary Inc. solutionlibary.com 9836dcf9d7 https://solutionlibrary.com/business/accounting/net-cash-flow-determinations-7gge
...a Project - Payback period:
Initial investment/Annual cash inflow
= 4 years
Using the payback period, Alpha ...