Question
Automotiv MP requires more space due to the requirements of its new customers and is planning to expand one of its manufacturing facilities in the
Automotiv MP requires more space due to the requirements of its new customers and is planning to expand one of its manufacturing facilities in the machining line. At n = 0, a piece of land must be purchased for the expansion of the plant. The building needs to be modified and the company also needs to spend on equipment and other requirements to start operations, with a total of $ 9.7 million. Once the plant is operating, it will generate revenues of $ 2.2 million in the first year of operation and each following year it will have an increase of $ 150,000 until the year 15 years. The expected salvage value will be $ 1,300,000. Annual operation and maintenance costs are estimated at $ 640,000. What is the payback period in years? (Put only the number, with two decimal places rounded, without the word years)
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