Recovery period (Payback period) A company dedicated to the sale of solid wood for the manufacture of wooden cabinets and furniture is considering investing in a wood shaping machine that will produce the following cash flows in the coming years. The investment will be made in two years as indicated below.

1. Determine the period of recovery of the investment. 2. Indicates whether this method is an appropriate tool to determine if the company should make the investment or not and why.

Ao Inversin Flujo de efectivo 1 $28,500 $1,500 2 $6,000 $3,000 $6,000 $6,750 $9,000 $7,500 $6,000 $4,500 $3,750 $3,750 9 10