Solution-What is the payback period

What is the payback period

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Question - X Company must replace one of its current machines with either Machine A or Machine B. The useful life of both machines is seven years. Machine A costs $51,000, Machine B cost $72,000. Estimated annual cash flows with the two machines are as follows:

Year	Machine A	Machine B
1	$-6,000	$-7,000
2	-8,000	-4,000
3	-8,000	-3,000
4	-8,000	-3,000
5	-6,000	-3,000
6	-5,000	-2,000
7	-4,000	-2,000

If X Company buys Machine B instead of Machine A, what is the payback period (in years)?

Reference no: EM132430968

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What is the payback period

Reference no: EM132430968

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