Problem 12-6 (Payback Period). Assume a $40,000 investment and the following cash flows for two alternatives:
Year Investment X Investment Y
1 $ 6,000 $ 15,000
2 8,000 20,000
3 9,000 10,000
4 17,000 –
5 20,000 –
Required:
(a) Calculate the payback for investment X and Y.
(b) Which alternative would you select under the payback method?
Click here for the solution: (Payback Period) Assume a $40,000 investment and the following cash flows for two alternatives
