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Payback method Assume a $90,000 investment and the following cash flows for two alternatives. Year Investment A Investment B 1................ $25,000 $40,000 2................ 30,000 40,000
Payback method Assume a $90,000 investment and the following cash flows for two alternatives.
Year | Investment A | Investment B |
1................ | $25,000 | $40,000 |
2................ | 30,000 | 40,000 |
3................ | 25,000 | 28,000 |
4................ | 19,000 | |
5................ | 25,000 |
a. Calculate the payback for investment A and B.
b. If the inflow in the fifth year for Investment A was $25,000,000 instead of $25,000, would your answer change under the payback method?
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