Assume a $6,500 investment and the following cash flows for twoalternatives. Year InvestmentX Investment Y 1 $1,000
Question:
Assume a $6,500 investment and the following cash flows for twoalternatives.
Year InvestmentX Investment Y
1 $1,000 $1,300
2 $1,800 $2,000
3 $1,700 $1,100
4 $2,000 $1,500
5 $ 600
Under the payback method, which of the following would be concluded?
A.Investment X should be selected.
B.Investment X & Y have thesame payback period.
C. Investment Y should beselected.
D. Neither investment isacceptable under the payback method.
Foundations of Financial Management
ISBN: 978-1259024979
10th Canadian edition
Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen, Doug Short, Michael Perretta