Question
Assume a $105,000 investment and the following cash flows for two alternatives. Year Investment X Investment Y 1 $30,000 $40,000 2 45,000 35,000 3 15,000
Assume a $105,000 investment and the following cash flows for two alternatives.
| Year | Investment X | Investment Y | ||||
| 1 | $30,000 | $40,000 | ||||
| 2 | 45,000 | 35,000 | ||||
| 3 | 15,000 | 35,000 | ||||
| 4 | 30,000 | |||||
| 5 | 10,000 | |||||
|
| ||||||
a. Calculate the payback for investment X and Y. (Do not round intermediate calculations. Round your answers to 2 decimal places.)
b. Which alternative would you select under the payback method?
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Investment X
-
Investment Y
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Handbook Of Financial Intermediation And Banking
Authors: Anjan V. Thakor, Arnoud Boot
1st Edition
0444515585, 978-0444515582
