Question
Payback, Accounting Rate of Return, Net Present Value, Internal Rate of Return Wheeler Company wants to buy a numerically controlled (NC) machine to be used
Payback, Accounting Rate of Return, Net Present Value, Internal Rate of Return Wheeler Company wants to buy a numerically controlled (NC) machine to be used in producing specially machined parts for manufacturers of trenching machines. The outlay required is $900,000. The NC equipment will last five years with no expected salvage value. The expected after-tax cash flows associated with the project follow: Year Cash Revenues Cash Expenses 1 $1,500,000 $1,300,000 2 1,500,000 1,300,000 3 1,500,000 1,300,000 4 1,500,000 1,300,000 5 1,500,000 1,300,000 Required: Compute the payback period for the NC equipment. Round your answer to one decimal place. Payback period = years
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