What will be the payback period

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Question - Birch manufacturing is considering the addition of another product line to its offerings. Equipment needed to produce the new line will cost $210,960. Birch estimates that the net cash inflows from the new product line will be as follows:

Years 1-10 $19,200 (each year)

Years 11-15 $4,740 (each year)

Year 16-20 $2,040

If the company can establish a steady customer base before production starts and the cash inflows will be $14,530 per year for years 1 - 15, what will be the payback period?

Reference no: EM132529940

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