Test Bank 6 - B

Birch manufacturing is considering the addition of another product line to its offerings. Equipment needed to produce the new line will cost $194,120. Birch estimates that the net cash inflows from the new product line will be as follows:

Years 1-10		$18,440	(each year)
Years 11-15		$4,860	(each year)
Year 16-20		$2,070

(a) Your answer is correct What is the payback period for the new product line? 12 Payback period years SHOW