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A machine costs $5240 and produces benefits of $1000 at the end of each year for eight years. Assume an annual interest rate of 10%. Use engineering economics principals a.) What is the payback period
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39 votes
A machine costs $5240 and produces benefits of $1000 at the end of each year for eight years. Assume an annual interest rate of 10%. Use engineering economics principals a.) What is the payback period in years

User Norcalli
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1 Answer

14 votes
14 votes

Answer:

5.24 YEARS

Step-by-step explanation:

Payback calculates the amount of time it takes to recover the amount invested in a project from it cumulative cash flows

Payback period = Amount invested / cash flow

5240 / 1000 = 5.24 YEARS

User Cynepnaxa
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