Assume a $170,000 investment and the following cash flows for two products: year product x product y 1 $ 40,000 $ 60,000 2 60,000 70,000 3 50,000 30,000 4 40,000 40,000

a. calculate the payback for products x and y. (do not round intermediate calculations. round your answers to 2 decimal places.)

b. which alternative would you select under the payback method

a. Product X = 3.50 years

   Product Y = 3.25 years

b. Product Y

Explanation:

The cash flows for the two products as well as the balance at the end of each year is given as follows:

For both products, the payback period is reached between the third and fourth year.

Product X:

Product Y:

Under the payback method, the alternative that presents the shortest payback period should be selected. Therefore, Product Y should be selected.

they allow producers to sell their products more cheaply than foreign competitors. - ( c.)

answer; private store;