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X Company must purchase a new delivery truck and is using the payback method to evaluate two possible trucks. Truck X costs $30,000; Truck Y
X Company must purchase a new delivery truck and is using the payback method to evaluate two possible trucks. Truck X costs $30,000; Truck Y costs $49,000. The useful life of both is seven years, with the following estimated operating cash flows: Year 1 2 3 Truck X $-6,000 -8,000 -8,000 -8,000 -6,000 -5,000 -4,000 Truck Y $-7,000 -4,000 -3,000 -3,000 -3,000 -2,000 -2,000 4. 5 6 7 If X Company chooses Truck Y instead of Truck X, what is the payback period (in years)? A: 2 B: 3|| OC: 4|| OD: 5| OE: 6| OF: 7
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