A company is contemplating investing in a new piece of manufacturing machinery. The amount to be invested is $140,000. The present value of the future cash flows is $138,000. Should the company invest in this project?

		8 years
		7 years
		6 years
		5 years

yes, because net present value is +$2,000

yes, because net present value is -$2,000

no, because net present value is +$2,000

no, because net present value is -$2,000

________

An anticipated purchase of equipment for $590,000, with a useful life of 8 years and no residual value, is expected to yield the following annual net incomes and net cash flows:

Year	Net Income	Net Cash Flow
1	$90,000	$120,000
2	70,000	120,000
3	80,000	120,000
4	80,000	90,000
5	70,000	60,000
6	70,000	40,000
7	60,000	40,000
8	60,000	30,000

What is the cash payback period?