PAYBACK PERIOD Kilebrew Manufacturing is considering an investment in a new automated manufacturing system. The new system requires an investment of $2,400,000 and either has:

a. Even cash flows of $600,000 per year or

b. The following expected annual cash flows: $300,000, $300,000, $800,000, $800,000, and $200,000.

Required:

Calculate the payback period for each case.

Cornerstone Exercise