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Matthew Corporation is considering adding a new product line that will require an investment of $218,000. The product line is estimated to generate cash inflows
Matthew Corporation is considering adding a new product line that will require an investment of $218,000. The product line is estimated to generate cash inflows of $32,000 the first year, $18,000 the second year, and $21,000 each year thereafter for ten more years. What is the payback period? If the company sets the cutoff for payback at 9 years will the company add the new product line or reject it? A. 6.81 years and accept making the new product line B. 6.81 years and reject making the product line C. 10.00 years and reject making the new product line D. 10.00 years and accept making the new product line
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