Gradebook ORION nent :54 PM HT? Multiple Choice Question 136 Keltner Enterprises

Question

Gradebook ORION nent :54 PM HT? Multiple Choice Question 136 Keltner Enterprises is considering investing in a new packing machine. The new machinge will providea $42,300 and it can be sold at the end of its 5-year useful life for S6,800, Keltner's requir in a new packing machine. The new machine will provide annual cash operating inflows of $12,300 for 5 years. The cost of the m ed rate of return is 10%, what is the packing machine's payback period? 2.89 years 7.69 years 3.44 years 3.99 years LINK TO TEXT al Policy set by your instructor By accessing this Question Assistance, you will learn while you earn points based on the Point Potenti only if you Earn answer this question correctly in your first

Explanation / Answer

SOLUTION

Payback period is 3.44 years.

Payback period = Initial Investment / Annual cash flows

= $42,300 / $12,300

= 3.44 years

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