Assume a company is going to make an investment of $450,000 in a machine and the following

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Assume a company is going to make an investment of $450,000 in a machine and the following are the cash flows that two different products would bring in years one through four.

Option A, Product A			Option B, Product B
$190,000			$150,000
190,000			180,000
60,000			60,000
20,000			70,000

Which of the two options would you choose based on this payback method?

Related Book For answer-question

Intermediate Accounting

ISBN: 978-0324300987

10th Edition

Authors: Loren A Nikolai, D. Bazley and Jefferson P. Jones

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Posted Date: May 29, 2022 07:25 AM

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Assume a company is going to make an investment of $450,000 in a machine and the following

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Expert Answer:

Option A should be selected Option A has a lower payback period ... View the full answer

Intermediate Accounting

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