Assume a $300,000 investment and the following cash flows for two products:

Year Product X Product Y

1 $ 90,000 $100,000

2 $100,000 $100,000

3 $20,000 $90,000

4. $50,000 $50,000

a. Calculate the payback for products X and Y. (Do not round intermediate calculations. Round your answers to 2 decimal places.)

Product X _____years (0.0 is wrong)

Product Y _3.2_ Years (3.2 years is correct)

b. Which alternative would you select under the payback method? multiple choice

Product Y is correct.