Your firm uses the payback method but does not discount any of the cash flows. - 4840

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Your firm uses the payback method but does not discount any of the cash flows. Calculate the payback for the following investment: A machine costs $200,000 with after-tax installation costs of $15,000. After-tax cash inflows are expected to be 36,000 per year for the next seven years. 

a. greater than 6 

b. 5.85 years 

c. 5.14 years 

d. 4.42 years 

Solution Description

Your firm uses the payback method but does not discount any of the cash flows.