However, if we look beyond the payback period, we see that project X returns only an additional $1,200 ($1,000 in year 3, $100 I year 4, and $100 in year 5), whereas project Y returns an additional, it appears that project Y is preferable to X. The payback approach ignores the cash flows in years 3, 4, and 5 for project X and in year 4 and 5 for project Y.