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Assume a company is going to make an investment of $440,000 in a machine and the following are the cash flows that two different products would bring in years one through four. Option A, Option B, Product A Product B $190,000 $155,000 190,000 175,000 55,000 60,000 15,000 60,000 A. Calculate the payback period of each product. Round your answers to 2 decimal places. Option A, Product A years Option B, Product B years

Assume a company is going to make an investment of $440,000 in a machine and the following are the cash flows that two different products would bring in years one through four. Option A, Option B, Product A Product B $190,000 $155,000 190,000 175,000 55,000 60,000 15,000 60,000 A. Calculate the payback period of each product. Round your answers to 2 decimal places. Option A, Product A years Option B, Product B years

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Assume a company is going to make an investment of $440,000 in a machine and the following are the cash flows that two different products would bring in years one through four. Option A, Option B, Product A Product B $190,000 $155,000 190,000 175,000 55,000 60,000 15,000 60,000 A. Calculate the payback period of each product. Round your answers to 2 decimal places. Option A, Product A years Option B, Product B years B. Which of the two options would you choose based on the payback method?
Transcribed Image Text:Assume a company is going to make an investment of $440,000 in a machine and the following are the cash flows that two different products would bring in years one through four. Option A, Option B, Product A Product B $190,000 $155,000 190,000 175,000 55,000 60,000 15,000 60,000 A. Calculate the payback period of each product. Round your answers to 2 decimal places. Option A, Product A years Option B, Product B years B. Which of the two options would you choose based on the payback method?
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