Payback, even and uneven cash flows. You have the opportunity to expand your business by purchasing new equipment for $159,000. You expect to incur cash fixed costs of $96,000 per year to use this new equipment, and you expect to incur cash variable costs in the amount of 10% of cash revenues.

1. Calculate the payback period for this investment assuming you will generate $140,000 in cash revenues every year.

2. Assume you expect the following cash revenue stream for this investment:

Based on this estimated revenue stream, what is the payback period for thisinvestment?

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$ 90,000 Year 1 115,000 Year 2 Year 3 130,000 Year 4 155,000 Year 5 170,000 Year 6 180,000 Year 7 140,000 Year 8 125,000 Year 9 80,000