Q) Betas recovery period (years) based on the simple payback decision criterion.

Simple Payback Period

= A + [B/C]

Where, A = Last period having negative cumulative cash flow

B = Absolute value of cumulative cash flow at last period having negative cumulative cash flow

C = Cash Flow during the period after the last period with negative cumulative cash flow

there is no other info provided or required

A cash crop specialist requires more significant harvesting capacity due to the purchase of an additional 900 acres of farmland. The parameter values of the three harvesters under consideration are provided below. Parameters 1. Initial Cost ($) Alpha 300,000 Gamma 390,000 205,000 at EOY1 increasing annually thereafter by $500 235,000 annually from EOY1 to EOY5 2. Revenues ($) Beta 350,000 200,000 at EOY1 increasing by $500 annually thereafter by $500 until EOY5; 206,000 at EOY6 increasing annually thereafter by 1% 113,000 at EOY1 increasing annually thereafter by 4% 3. Operating costs ($) 110,000 at EOY1 increasing annually thereafter by 2% 115,000 at EOY1 increasing annually thereafter by 2% 10,000 -10,000 0 4. End-of-life salvage value ($) 5. Useful life (years) 5 10 5 All parameter values are fictitious. EOY = End-of-year Industry standard for backhoes = 4 years MARR = 10% . DISCRETE CASH FLOWS AND DISCRETE COMPOUNDING 10.00% DISCRETE RATE OF INTEREST i% = 0.1000 k%= 0.1200 n (F/P,i%,n) | (P/F,i%,n) (A/P,i%,n) (P/A,i%,n) (A/F,i%,n) (FIA,i%,n) (A/G,1%,n) (P/G,i%,n) (F/G,i%,n) (P/C,i,kN) i #k 0.9091 (PIC.ik,N). i=k 0.9091 1 1.1000 0.9091 0.9091 1.0000 1.0000 0.0000 1.1000 0.5762 0.0000 0.8264 2 1.2100 0.8264 1.7355 0.4762 1.8347 0.0000 1.0000 3.1000 1.8182 2.1000 3.3100 3 2.4869 0.4762 0.3021 0.2155 1.3310 1.4641 2.7772 0.7513 0.6830 0.6209 0.4021 0.3155 0.9366 1.3812 2.3291 4.3781 2.7273 3.6364 4 3.1699 6.4100 3.7367 4.6410 6.1051 5 1.6105 0.2638 3.7908 0.1638 1.8101 6.8618 11.0510 4.7138 4.5455 6 1.7716 0.2296 4.3553 0.1296 7.7156 9.6842 17.1561 5.7086 7 1.9487 2.1436 0.5645 0.5132 0.4665 0.2054 0.1874 0.1736 4.8684 5.3349 0.1054 0.0874 9.4872 11.4359 2.2236 2.6216 3.0045 12.7631 16.0287 24.8717 34.3589 45.7948 6.7215 7.7528 8 5.4545 6.3636 7.2727 8.1818 9 2.3579 0.4241 5.7590 0.0736 13.5795 3.3724 8.8028 10 2.5937 0.0627 15.9374 59.3742 9.0909 91 1112 0.3855 0.3505 0.1627 0.1540 6.1446 6.4951 3.7255 4.0641 19.4215 22.8913 26.3963 29.9012 2.8531 0.0540 18.5312 75.3117 9.8719 10.9605 12.0689 10.0000 3.1384 0.3186 0.1468 0.0468 21.3843 4.3884 93.8428 10.9091 6.8137 7.1034 13 3.4523 0.2897 0.1408 0.0408 24.5227 33.3772 11.8182 115.2271 139.7498 13.1974 14.3465 14 3.7975 0.2633 0.1357 27.9750 4.6988 4.9955 5.2789 7.3667 7.6061 12.7273 0.0357 0.0315 36.8005 40.1520 4.1772 0.2394 0.1315 31.7725 167.7248 15.5164 13.6364 16 7.8237 0.0278 199.4973 14.5455 O o la 4.5950 5.0545 0.2176 0.1978 0.1799 0.1278 0.1247 17 8.0216 235.4470 43.4164 46.5819 49.6395 15.4545 5.5493 5.8071 6.0526 6.2861 16.7076 17.9205 19.1554 18 0.0247 0.0219 0.0195 5.5599 35.9497 40.5447 45.5992 51.1591 57.2750 0.1219 8.2014 16.3636 275.9917 321.5909 19 6.1159 0.1635 0.1195 8.3649 20.4128 17.2727 52.5827 55.4069 20 6.7275 0.1486 0.1175 8.5136 0.0175 6.5081 372.7500 21.6930 18.1818