Question
Assume a $90,000 investment and the following cash flows for two alternatives. Year Investment X Investment Y 1 $25,000 $50,000 2 30,000 30,000 3 25,000
Assume a $90,000 investment and the following cash flows for two alternatives.
| Year | Investment X | Investment Y |
| 1 | $25,000 | $50,000 |
| 2 | 30,000 | 30,000 |
| 3 | 25,000 | 20,000 |
| 4 | 20,000 | ---- |
| 5 | 25,000 | ---- |
a. Calculate the payback for investment X and Y. (Do not round intermediate calculations. Round your answers to 2 decimal places.)
Investment X ______ Years
Investment Y ______Years
b. Which alternative would you select under the payback method?
| Investment X | |
| Investment Y |
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Mathematics Of Finance
Authors: Robert Brown, Steve Kopp, Petr Zima
8th Edition
0070876460, 978-0070876460
