Posted by **Carla** on Saturday, July 10, 2010 at 8:07pm.

Investment X offers to pay you $6,000 per year for nine years, whereas Investment Y offers to pay you $8,000 per year for six years. If the discount rate is 5 percent, Investment X has a present value of ? and Investment Y has a present value of ?. If the discount rate is 15 percent, Investment X has a present value of ? and Investment Y has a present value of ?

- Finance -
**PLewis**, Sunday, April 24, 2011 at 5:51pm
Assume a $4,000 investment and the following cash flows for two alternatives.

Year InvestmentX Investment Y

1 $1,000 $1,300

2 800 2,800

3 700 100

4 1,900

5 2,000

a. Under the payback method, which investment should be chosen? (Show your work/analysis/calculations for each investment).

b. Why do other methods allow for a better analysis?

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