A23. (Capital budgetingpayback method) Allenby Corp. has $10 million to invest. Listed below are the expected future cash inflows to be received for four alternative investments, in millions of dollars.

Investment A, Investment B, Investment C, Investment D Year 1 7, 1, 0, 7 Year 2 1, 2, 0, 3 Year 3 2, 7, 3, 0 Year 4 2, 8, 7, 0 Year 5 2, 9, 10, 0

A. Compare investments A and B. a. Compute the payback periods for Investments A and B. b. Which one would you pick, based only on payback period? c. Do you think one is a better investment?

B. Compare investments C and D. a. Compute the payback periods b. Which one would you pick, based on the payback periods? c. Do you think this is the better investment? Why, or why not?