Text: Ch 19: End-of-Chapter Problems - Break-Even Analysis and the Payback Period
Problem 19-05
Three investments cost $6,500 each and have the following cash flows. Rank them on the basis of their payback periods. Round your answers to one decimal place.
Year A B C
1 $2,700 $4,000 0
2 $2,700 $3,200 $1,200
3 $2,700 $2,400 $1,600
4 $2,700 $1,900 $2,900
5 $2,700 $1,500 $4,900
Payback for A: investment A
Payback for B: investment B
Payback for C: investment C
I should be chosen