What exactly is the payback period for this investment

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Reference no: EM131081497

You plan to propose the purchase of a machine to the engineering manager and you expect her to ask for the payback period of this investment. You also know that she generally doesn’t approve anything with a payback of over five years. The interest rate the company uses in these situations is 10%. The machine will cost $168,000 to purchase and will generate a revenue stream of $50k, $57k, $64k, $71k, and $78k in years 2 to 6. There will be no salvage to this machine. Should you go ahead with this proposal? If so, what exactly is the payback period for this investment?

Reference no: EM131081497

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