Assume a $55,000 investment and the following cash flows for twoalternatives.YearInvestment A Investment B$ 15,000$35,0001225,00010,00020,00015,00025,0003420,000a. Calculate the payback for investment A and B. (Round your answersto 2 decimal places.)Investment AyearsInvestment Byearsb. Which investment would you select under the payback method?O Investment AO Investment Bc. If the inflow in the fifth year for Investment A was $20,000,000instead of $20,000, would your answer change under the paybackmethod?YesO No

A method of capital budgeting that helps to evaluate the time period a project requires to cover its…

Assume a $55,000 investment and the following cash flows for two alternatives. Year Investment A Investment B $ 15,000 25,000 1 $35,000 15,000 25,000 3 10,000 20,000 4 5 20,000 a. Calculate the payback for investment A and B. (Round your answers to 2 decimal places.) Investment A Investment B years years b. Which investment would you select under the payback method? Investment A O Investment B c. If the inflow in the fifth year for Investment A was $20,000,000 instead of $20,000, would your answer change under the payback method? Yes O No

Assume a $55,000 investment and the following cash flows for two alternatives. Year Investment A Investment B $ 15,000 25,000 1 $35,000 15,000 25,000 3 10,000 20,000 4 5 20,000 a. Calculate the payback for investment A and B. (Round your answers to 2 decimal places.) Investment A Investment B years years b. Which investment would you select under the payback method? Investment A O Investment B c. If the inflow in the fifth year for Investment A was $20,000,000 instead of $20,000, would your answer change under the payback method? Yes O No

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 4EA: Assume a company is going to make an investment of $450,000 in a machine and the following are the...

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