What is the pay back period for the in house option

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Reference no: EM132021947

the table below shows the cash flow associated with making a part in-house or by using contract labor.

In-House COntract Labor

First cost $ 43000 2000

annual cost 5000 2000

annual income 14000 ??

salvage value 7,000 none

life years 9 7

What is the pay back period for the in house option if the interest rate is 9% per year? how much annual income (the in the table) must the contract labor generate that will make each option equally attractive if the interest rate is B $4365 9% per year?

Reference no: EM132021947

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