Mistral Manufacturing is considering an investment in a new, high-efficient machine. The new machine requires an initial investment of $1,750,000. The new system cash flows of either:
a. Even cash flows of $350,000 per year or
b. The following expected annual cash flows: $275,000, $420,000, $820,000, $470,000, and $150,000
Required: Calculate the payback period for each case.

Question

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The Answer of Mistral Manufacturing is considering an investment in a new, high-efficient machine. The new machine requires an initial investment of $1,750,000. The new system cash flows of either:
a. Even cash flows of $350,000 per year or
b. The following expected annual cash flows: $275,000, $420,000, $820,000, $470,000, and $150,000
Required: Calculate the payback period for each case.

Mistral Manufacturing Is Considering an Investment in a New, High-Efficient