The company is considering the purchase of a new machine for $75,660 (based on the available data), and the payback period is <u>24 years</u>.
<h3>What is the payback period?</h3>
The payback period is the time the company requires to recoup its investment for the new machine.
The payback period can be computed by dividing the investment cash outflows by the annual net cash inflows.
<h3>Data and Calculations:</h3>
Initial investment in new machine = $75,660
Annual depreciation expense = $4,600
Investment period = 10 years
Annual sales revenue = $20,000
Annual expenses = $16,800
Ne annual cash inflow = $3,200 ($20,000 - $16,800)
Payback period = 24 years ($75,660/$3,200)
Thus, since the payback period is <u>24 years</u>, while the investment period is 10 years, it sounds unwise for the company to continue the investment.
Learn more about the payback period at brainly.com/question/23149718
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