Assume a $55,000 investment and the following cash flows for two alternatives: Year 12345 3 Investment...
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Assume a $55,000 investment and the following cash flows for two alternatives: Year 12345 3 Investment X $15,000 25,000 10,000 20,000 3,700,000 Investment X Investment Y Calculate the payback period for investment X and Y. (Round the final answers to 2 decimal places.) Payback period years years Investment Y $20,000 15,000 30,000 Which of the alternatives would you select under the payback method? O Investment X O Investment Y Assume a $55,000 investment and the following cash flows for two alternatives: Year 12345 3 Investment X $15,000 25,000 10,000 20,000 3,700,000 Investment X Investment Y Calculate the payback period for investment X and Y. (Round the final answers to 2 decimal places.) Payback period years years Investment Y $20,000 15,000 30,000 Which of the alternatives would you select under the payback method? O Investment X O Investment Y
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SOLUTION To calculate the payback period for each investment we need to keep adding up the cash flows until we recover the initial investment of 55000 For Investment X Year 1 cash flow ... View the full answer
Related Book For
Financial and Managerial Accounting Using Excel for Success
ISBN: 978-1111993979
1st edition
Authors: James Reeve, Carl S. Warren, Jonathan Duchac
Posted Date:
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