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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

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.)

Payback
Product X years
Product Y years

b.

Which alternative would you select under the payback method?

Product Y is selected
Product X is selected

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