Assume a $60,000 investment and the following cash flows for two alternatives.

Year Investment A Investment B

1 $ 15,000 $ 20,000

2 20,000 20,000

3 22,000 40,000

4 15,000

5 10,000

a. Calculate the payback for investment A and B. (Round your answers to 2 decimal places.)

Investment A years

Investment B years

b. Which investment would you select under the payback method?

Investment A

Investment B

c. If the inflow in the fifth year for Investment A was $10,000,000 instead of $10,000, would your answer change under the payback method?

Yes

No