Dinah, the operator of Dinah’s Diner, wishes to choose between two alternative investments providing the following annual net cash inflows over the five-year investment period:

Calculate the payback time for each alternative, assuming an initial investment of $33,000 under each alternative.LO1

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1 $8,000 Year Alternative 1 Alternative 2 $ 4,200 2 8,600 5,800 3 8,800 8,500 4 8,200 11,500 5 4,100 12,100