Question
Assume a $62,000 investment and the following cash flows for two alternatives: Year Investment A Investment B 1 $20,000 $25,000 2 12,000 15,000 3 15,000
Assume a $62,000 investment and the following cash flows for two alternatives:
| Year | Investment A | Investment B | ||||
| 1 | $20,000 | $25,000 | ||||
| 2 | 12,000 | 15,000 | ||||
| 3 | 15,000 | 22,000 | ||||
| 4 | 15,000 | |||||
| 5 | 25,000 | |||||
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?
multiple choice
-
Investment A
-
Investment B
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Fundamentals Of Corporate Finance
Authors: Jonathan Berk, Peter DeMarzo, Jarrad Harford
5th Edition
0135811600, 978-0135811603
