Question
Assume a $42,000 investment and the following cash flows for two alternatives: Year Investment A Investment B 1 $15,000 $22,000 2 10,000 10,000 3 10,000
Assume a $42,000 investment and the following cash flows for two alternatives:
| Year | Investment A | Investment B | ||||
| 1 | $15,000 | $22,000 | ||||
| 2 | 10,000 | 10,000 | ||||
| 3 | 10,000 | 10,000 | ||||
| 4 | 15,000 | |||||
| 5 | 20,000 | |||||
Calculate the payback period for investment A and investment B. (Do not round intermediate calculations. Round the final answers to 2 decimal places.)
| Payback period | ||
| Investment A | years | |
| Investment B | years | |
Which of the alternatives would you select under the payback method?
-
Investment A
-
Investment B
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Public Finance And Public Policy
Authors: Arye L. Hillman
2nd Edition
0521738059, 978-0521738057
