Equipment a Costing $100,000 Is Expected to Generate $15,000 Annually

Multiple Choice

Equipment A costing $100,000 is expected to generate $15,000 annually in cash inflows during its life of 7 years.Equipment B costing $150,000 is expected to generate $22,000 annually in cash inflows during its life of 8 years.Equipment C costing $80,000 is expected to generate $16,000 annually in cash inflows during its life of 6 years Rank the three investments in terms of payback period.

A) A1,B2,C3
B) B1,A2,C3
C) C1,A2,B3
D) C1,B2,A3