Tiffany Co. is analyzing two projects for the future. Assume that only one project can be selected.                                             Project Y                  Project X Cost of machine             P680,000                 P600,000 Net cash flow:                                                   Year 1                               240,000                    40,000 Year 2                               240,000                    260,000 Year 3                               240,000                    260,000 Year 4                               0                                200,000   If the company is using the payback period method and it requires a payback of three years or less, which project should be selected? Group of answer choices Project Y. Project Y because it has a lower initial investment. Both X and Y are acceptable projects. Project X. Neither X nor Y is an acceptable project.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Tiffany Co. is analyzing two projects for the future. Assume that only one project can be selected.

 

                                          Project Y                  Project X

Cost of machine             P680,000                 P600,000

Net cash flow:                                                  

Year 1                               240,000                    40,000

Year 2                               240,000                    260,000

Year 3                               240,000                    260,000

Year 4                               0                                200,000

 

If the company is using the payback period method and it requires a payback of three years or less, which project should be selected?

Group of answer choices
Project Y.
Project Y because it has a lower initial investment.
Both X and Y are acceptable projects.
Project X.
Neither X nor Y is an acceptable project.
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