Assume a $250,000 investment and the following cash flows for
two alternatives:
Year Product X Product Y
1 $ 90,000 $ 50,000
2 90,000 80,000
3 60,000 60,000
4 20,000 70,000
a. Calculate the payback for products X and Y. (Do not round
intermediate calculations. Round your answers to 2 decimal
places.)
Payback
Product X years
Product Y years
b. Which of the alternatives would you select under the payback
method?
Product X
Product Y
Assume a $105,000 investment and the following cash flows for
two alternatives.
Year
Investment X
Investment Y
1
$30,000
$40,000
2
45,000
35,000
3
15,000
35,000
4
30,000
—
5
10,000
—
a. Calculate the payback for investment X and Y.
(Do not round intermediate calculations. Round your answers
to 2 decimal places.)
b. Which alternative would you select under the
payback method?
Investment X
Investment Y
Assume a $70,000 investment and the following cash flows for two
alternatives.
Year
Investment X
Investment Y
1
$15,000
$35,000
2
20,000
20,000
3
20,000
20,000
4
20,000
—
5
15,000
—
a. Calculate the payback for investment X and Y.
(Do not round intermediate calculations. Round your answers
to 2 decimal places.)
b. Which alternative would you select under the
payback method?
Investment X
Investment Y
Assume a $62,000 investment and the following cash flows for two
alternatives.
Year
Investment X
Investment Y
1
$20,000
$35,000
2
15,000
15,000
3
15,000
22,000
4
15,000
—
5
25,000
—
a. Calculate the payback for investment X and Y.
(Do not round intermediate calculations. Round your answers
to 2 decimal places.)
b. Which alternative would you select under the
payback method? Investment X or Y?
Assume a $52,000 investment and the following cash flows for two
alternatives.
Year
Investment A
Investment B
1
$15,000
$25,000
2
15,000
15,000
3
15,000
20,000
4
10,000
-
5
15,000
-
a. Calculate the payback for investment A and B. Round your
answers to 2 decimal places.
Investment A
years
Investment B
years
b. Which investment would you select under the payback
method?
-Investment A
-Investment B
c. If the inflow in the fifth year for Investment A was...
Assume a $40,000 investment and the following cash flows for two
alternatives. Year Investment A Investment B 1 $ 5,000 $ 25,000 2
12,000 10,000 3 15,000 20,000 4 10,000 — 5 10,000 — a. Calculate
the payback for investment A and B. (Round your answers to 2
decimal places.) b. Which investment would you select under the
payback method? Investment A Investment B c. If the inflow in the
fifth year for Investment A was $10,000,000 instead of $10,000,...
Assume a $95,000 investment and the following cash flows for two
alternatives:
Year
Investment A
Investment B
1
$25,000
$30,000
2
15,000
30,000
3
30,000
40,000
4
30,000
—
5
20,000
—
Calculate the payback period for investment A and investment B.
Show calculation. (Do not round
intermediate calculations. Round the final answers to 2 decimal
places.)
Payback period
Investment A
years
Investment B
years
Assume a $95,000 investment and the following cash flows for two
alternatives.
Year
Investment A
Investment B
1
$
35,000
$
40,000
2
30,000
35,000
3
20,000
25,000
4
20,000
—
5
20,000
—
a. Calculate the payback for investment A and B.
(Round your answers to 2 decimal places.)
b. Which investment would you select under the
payback method?
Investment A
Investment B
c. If the inflow in the fifth year for Investment
A was $20,000,000 instead...
Payback method Assume
a $90,000 investment and the following cash flows for two
alternatives.
Year
Investment A
Investment B
1................
$25,000
$40,000
2................
30,000
40,000
3................
25,000
28,000
4................
19,000
—
5................
25,000
—
a.
Calculate the payback for investment A and B.
b. If the
inflow in the fifth year for Investment A was $25,000,000 instead
of $25,000, would your answer change under the payback method?
5. Assume a $200,000 investment and the following cash flows for
two alternative capital projects: Year Project A Project B 1
$60,000 $40,000 2 90,000 70,000 3 50,000 80,000 4 40,000 20,000 a.
Calculate the payback period for each project. b. Using the payback
method, if the projects are mutually exclusive, which project would
you select and why? c. If the year four cash flows were $100,000
for Project A and $500,000 for Project B, would your decision
change under...