Item16

15points

Item16

Sentinel Company is considering an investment in technology to improve its operations. The investment will require an initial outlay of $254,000 and will yield the following expected cash flows. Management requires investments to have a payback period of 3 years, and it requires a 7% return on investments. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the table provided.)

Period	Cash Flow
1		$	48,200
2			53,300
3			75,400
4			94,500
5			126,300

Required: 1. Determine the payback period for this investment. 2. Determine the break-even time for this investment. 3. Determine the net present value for this investment.

Sints Required 1 Required 2 Required 3 Determine the payback period for this investment. (Enter cash outflows with a minus sign. Round your Payback period answer to 1 decimal place.) Year Cash inflow (outflow) Cumulative Net Cash Inflow (outflow) 0 $ (254,000) 1 2 3 4 5 Payback period = Required 1 Required 2 > 5 ints Required 1 Required 2 Required 3 Determine the break-even time for this investment. (Enter cash outflows with a minus sign. Round your break-even time answer to 1 decimal place.) Year Cash inflow (outflow) Table factor Present Value of Cash Flows Cumulative Present Value of Cash Flows 0 $ (254,000) 1 2 3 4 5 Break-even time = Required 1 Required 2 Required 3 Determine the net present value for this investment. Net present value