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. (Do not round intermediate calculations. Round the final answers to 2 decimal places.)

Payback period Investment A years Investment B years

Which of the alternatives would you select under the payback method?

• Investment A

Investment B