Problem 24-6A Payback period, break-even time, and net present value LO P1, A1

Lenitnes Company is considering an investment in technology to improve its operations. The investment will require an initial outlay of $265,000 and will yield the following expected cash flows. Management requires investments to have a payback period of 4 years, and it requires a 10% return on its 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		$	123,100
2			92,300
3			70,800
4			53,000
5			48,700

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.

Determine the payback period for this investment. (Round your Payback Period answer to 1 decimal place. Enter cash outflows with a minus sign.)

Year	Cash inflow (outflow)	Cumulative Net Cash Inflow (outflow)
0	$(265,000)
1
2
3
4
5
Payback period =

Determine the break-even time for this investment. (Round your Payback Period answer to 1 decimal place. Enter cash outflows with a minus sign.)

Year	Cash inflow (outflow)	Table factor	Present Value of Cash Flows	Cumulative Present Value of Cash Flows
0	$(265,000)
1
2		0.8264
3		0.7513
4		0.6830
5		0.6209
Break-even time =

Determine the net present value for this investment.

Net present value