Question
Assume a $75,000 investment and the following cash flows for two alternatives. Year Investment A Investment B 1 $ 25,000 $ 35,000 2 10,000 25,000
| Assume a $75,000 investment and the following cash flows for two alternatives. |
| Year | Investment A | Investment B | ||||
| 1 | $ | 25,000 | $ | 35,000 | ||
| 2 | 10,000 | 25,000 | ||||
| 3 | 25,000 | 20,000 | ||||
| 5 | 20,000 | |||||
| 5 | 10,000 | |||||
| a. | Calculate the payback for investment A and B. (Round your answers to 2 decimal places.) |
| Payback | ||
| Investment A | years | |
| Investment B | years | |
| b. | Which investment would you select under the payback method? | ||||
|
| 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? | ||||
|
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An Introduction To Socio-Finance
Authors: Jørgen Vitting Andersen, Andrzej Nowak
2013th Edition
3642419437, 978-3642419430
