Question
Assume a $120,000 investment and the following cash flows for two products: Year Product X Product Y 1 $ 50,000 $ 50,000 2 50,000 40,000
Assume a $120,000 investment and the following cash flows for two products:
| Year | Product X | Product Y | ||||
| 1 | $ | 50,000 | $ | 50,000 | ||
| 2 | 50,000 | 40,000 | ||||
| 3 | 20,000 | 20,000 | ||||
| 4 | 20,000 | 20,000 | ||||
|
| ||||||
a. Calculate the payback for products 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?
| Product X is selected | |
| Product Y is selected |
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Personal Finance
Authors: E. Thomas Garman, Raymond E. Forgue, Jonathan Fox
14th Edition
0357901495, 9780357901496
