Exercise 16-12 Determining the payback period LO 16-4 Bailey Airline Company is considering expanding its territory. The company has the opportunity to purchase one of two different used airplanes. The first airplane is expected to cost $18,290,000; it will enable the company to increase its annual cash inflow by $5,900,000 per year. The plane is expected to have a useful life of five years and no salvage value. The second plane costs $34,580,000; it will enable the company to increase annual cash flow by $9,100,000 per year. This plane has an eight-year useful life and a zero salvage value. Required a-1. Determine the payback period for each investment alternative. (Round your answers to 1 decimal place.)

	payback period
alternative 1		years
alternative 2		years

a-2. Identify the alternative Bailey should accept if the decision is based on the payback approach. A- Alternative 1 B-Alternative 2