O eBook 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 thr Option A, Option B, Product A Product B $190,000 $145,000 195,000 185,000 60,000 55,000 15,000 75,000 A. Calculate the payback period of each product. Round your answers to 2 decimal places. Option A, Product A 3.33 years Option B, Product B years B. Which of the two options would you choose based on the payback method?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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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,
Option B,
Product A Product B
$190,000
$145,000
195,000
185,000
60,000
55,000
15,000
75,000
A. Calculate the payback period of each product. Round your answers to 2 decimal places.
Option A, Product A
3.33
years
Option B, Product B
years
B. Which of the two options would you choose based on the payback method?
Transcribed Image Text:genow.com/ilrn/takeAssignment/takeAssignmentMam.co?invoker=&takeAssignmentSesslor eВook 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, Option B, Product A Product B $190,000 $145,000 195,000 185,000 60,000 55,000 15,000 75,000 A. Calculate the payback period of each product. Round your answers to 2 decimal places. Option A, Product A 3.33 years Option B, Product B years B. Which of the two options would you choose based on the payback method?
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