Fabricating Solutions is looking at the financials for a CNC machine. The expected life cycle for the machine is 6 years. The initial projected product design costs are $725,000. Fabricating Solutions typically uses a discount rate of 14% for all new product financials.

-For the project, how long will it take to recover the initial investments?
A)Less than two years
B)Between two years and three years
C)Between three years and four years
D)Between four years and five years
E)More than five years

Question

Fabricating Solutions is looking at the financials for a CNC machine. The expected life cycle for the machine is 6 years. The initial projected product design costs are $725,000. Fabricating Solutions typically uses a discount rate of 14% for all new product financials.
 
-For the project, how long will it take to recover the initial investments?
A)Less than two years 
B)Between two years and three years 
C)Between three years and four years 
D)Between four years and five years 
E)More than five years

Quizplus · Accepted Answer

The correct answer is based on the project's cash flow analysis, which indicates that the initial investment will be recovered between three and four years.

Fabricating Solutions Is Looking at the Financials for a CNC