Project X will last for 5 years and will pay back the investment in 2 years.

Project Y will last for 10 years and will pay back the investment in 1.5 years.

Project Z will produce a level perpetuity of cash flows and will pay back the investment in 4 years.

Cost of capital is 10%. The projects are not mutually exclusive.

which of the following is correct?

X and Y are worth pursuing because they payback faster than Z.

All of the projects are worth pursuing because they pay back quickly enough.

It is not possible to know which are worth pursuing.

Z is worth pursuing because it pays back fast enough and will last forever. There is not enough information on X and Y.

X is worth pursuing because it pays back fastest.