Question: The cash flows for three alternatives are as follows: (a) Based on payback period, which alternative should be selected? (b) Using future worth analysis, and

The cash flows for three alternatives are as follows:

Year -$500 -$600 -$900 -400 -300 350 200 200 250 300 200 4 300 250 200 200 350 200 400 150 200 3.


(a) Based on payback period, which alternative should be selected?

(b) Using future worth analysis, and a 12% interest rate, determine which alternative should be selected.

Year -$500 -$600 -$900 -400 -300 350 200 200 250 300 200 4 300 250 200 200 350 200 400 150 200 3.

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