Coffer Company is analyzing two potential investments.

	Project X	Project Y
Cost of machine	$ 100,500	$ 74,000
Net cash flow:
Year 1	37,500	3,900
Year 2	37,500	34,500
Year 3	37,500	34,500
Year 4	0	22,000

If the company is using the payback period method, and it requires a payback period of three years or less, which project(s) should be selected?

Multiple Choice

• Project Y.

• Project X.

• Both X and Y are acceptable projects.

• Neither X nor Y is an acceptable project.

• Project Y because it has a lower initial investment.