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Radda [10]
2 years ago
12

A company is considering a capital investment of $16,000 in new equipment which will improve production and increase cash flows

for the next five years at the following amounts: year 1: $8,000; year 2: $6,000; year 3: $5,000; year 4: $6,000; year 5: $5,000. the payback period is years.
SAT
1 answer:
otez555 [7]2 years ago
6 0

Based on the cost of the capital investment in the new equipment and the cash flows for the next five years, the payback period is 2.4 years.

<h3>What is the payback period?</h3>

The payback period can be found by the formula:

= Year before payback + Amount remaining to be paid / Cashflow in year of payback

The year before payback can be inferred to be the Second year because $14,000 would have come in.

The remaining amount is:

= 16,000 - 14,000

= $2,000

Payback period is:

= 2 + 2,000 / 5,000

= 2.4 years.

Find out more on the payback period at brainly.com/question/23149718.

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<h3>What is straight angle? </h3>
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