Problems, Ch. 10: Capital Budgeting Techniques 10-1: Nanosecond Time Machines Co. is weighing the suitability of two mutually exclusive projects, Project X1 and Project X2. The estimated payback schedule (after-tax cash flow) is shown below. The CFO has set 3 years as maximum acceptable payback duration for a project outlay of $65,000 for either project. Year Project X1 Project X2 1 $35,000 $20,000 20,000 20,000 3 15,000 30,000 (A) Calculate the payback period for Projects X1 and X2. (B) Now consider the payback schedule below for the same projects: Year Project X1 Project X2 1 $35,000 $20,000 2 20,000 20,000 3 10,000 25,000 N What are the new paybacks for Projects X1 and X2? (C) Which of the two projects should the company choose? Explain why