Eagle Corporation is considering the purchase of a new machine. The machine costs $550,000 and will generate an annual net cash inflow of $100,000. What is the payback period? a) 4 years and 6 months b) 5 years c) 5 years and 6 months d) 6 years and 1 mon

Question:

Eagle Corporation is considering the purchase of a new machine. The machine costs $550,000 and will generate an annual net cash inflow of $100,000. What is the payback period?

a) 4 years and 6 months

b) 5 years

c) 5 years and 6 months

d) 6 years and 1 month

Payback Period:

It is a capital budgeting technique that determines the number of years an investment takes to recover its costs through its annual cash flows. The drawback is it does not consider the time value of money.

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Eagle Corporation is considering the purchase of a new machine. The machine costs $550,000 and...

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Payback Period:

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