Problem 12-6 Payback method LO3 Assume a $250,000 investment and the following cash flows for two products: ProductY $50,000 $80,000 $60,000 $70,000 Year ProductX $90,000 $90,000 $60,000 $20,000 a. Calculate the payback for products X and Y. (Do not round intermediate calculations. Round your answers to 2 decimal places.) b. Which alternative would you select under the payback method? Input variables: $250,000 Investment amount Cash flows: Year 1 Year 2 Year 3 Year 4 Product X Product Y $90,000 90,000 60,000 20,000 $50,000 80,000 60,000 70,000 Solution and Explanation: Product X: Amount yet to be Recovered Cash flows Initial investment Year 1 Year 2 Year 3 Year 4