Assume a $100,000 investment and the following cash flows for two alternatives.

Year Investment A Investment B

1 . $ 30,000 $ 45,000

2 . 35,000 30,000

3 25,000 50,000

4 20,000

5 15,000

a. Calculate the payback for investment A and B. (Round your answers to 2 decimal places.)

investment A

investment B

b. Which investment would you select under the payback method?

Investment A Investment B

c. If the inflow in the fifth year for Investment A was $15,000,000 instead of $15,000, would your answer change under the payback method?

Yes No