E: 3

Assume a $74,000 investment and the following cash flows for two alternatives.

Year 1 2 3 4 5

Investment X $ 15,000 24,000 32,000 15,000 30,000

Investment Y $ 34,000. 30,000 15,000 ___ ___

a.Calculate the payback for investment X andY.(Do not round intermediate calculations. Round your answers to 2 decimal places.)

Payback

Investment X years

Investment Y years

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

Investment X or Investment Y?