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Coffer CoIs Analyzing Two Projects for the Future If the Company Is Using the Payback Period Method and One

question 104

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Coffer Co.is analyzing two projects for the future.Assume that only one project can be selected.  Project X  Project Y  Cost of machine $68,000$60,000 Net cash flow:  Year 1 24,0004,000 Year 2 24,00026,000 Year 3 24,00026,000 Year 4 020,000\begin{array} { c r r } & \frac { \text { Project X } } { } & \frac { \text { Project Y } } { } \\\text { Cost of machine } & \$ 68,000 & \$ 60,000 \\\text { Net cash flow: } & & \\\text { Year 1 } & 24,000 & 4,000 \\\text { Year 2 } & 24,000 & 26,000 \\\text { Year 3 } & 24,000 & 26,000 \\\text { Year 4 } & 0 & 20,000\end{array} If the company is using the payback period method and it requires a payback of three years or less,which project should be selected?


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