Porter Co Is Analyzing Two Projects for the Future - the Payback Period in Years for Project Y Is

question 160

Multiple Choice

Porter Co. is analyzing two projects for the future. Assume that only one project can be selected. $$\begin{array} { l r r } & \text { Project X } & \text { Project } Y \\\text { Cost of machine } & \$ 68,000 & \$ 60,000 \\\text { Net cash flow: } & & \\\text { Year 1 } & 24,000 & 4,000 \\\text { Year 2 } & 24,000 & 26,000 \\\text { Year 3 } & 24,000 & 26,000 \\\text { Year 4 } & 0 & 20,000\end{array}$$
- The payback period in years for Project Y is:

• A) 2.00.
• B) 3.50.
• C) 3.20.
• D) 3.83.
• E) 4.00.

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