Chapter $12,$ Problems.

Foundations of Financial Management. $16$th edition. Block, Hirt, and Danielsen.

Please make the Excel files for this question.

$7.$ Payback method $($LO$3)$ Assume a $$40,000$ investment and the following cash flows for two alternatives.

Year Investment X Investment Y

$1$$ $6,000$ $$15,000$

$2$ $$8,000$ $$20,000$

$3$ $$9,000$ $$10,000$

$4$ $$17,000$

$5$ $$20,000$

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