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Toya Motors needs a new machine for production of its 1994-1995 models. The financial vice president has appointed you to do the capital budgeting analysis.
Toya Motors needs a new machine for production of its 1994-1995 models. The financial vice president has appointed you to do the capital budgeting analysis. You have identified two different machines that are capable of performing that job. You have completed the cash flow analysis, and the expected net cash flows are the following:
Expected Net Cash Flow
Year Machine B Machine 0
0 ($ 5,000) ($ 5,000)
1 2,085 0
2 2,085 0
3 2,085 0
4 2,085 9,677
What is the payback period for Machine B?
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