Unit # 6 -Test Bank 6 - Part B

Birch manufacturing is considering the addition of another product line to its offerings. Equipment needed to produce the new line will cost $208,250. Birch estimates that the net cash inflows from the new product line will be as follows:

PLEASE ANSWER - PART B

If the company can establish a steady customer base before production starts and the cash inflows will be $14,530 per year for years 1 15, what will be the payback period? (Round answer to 2 decimal places, e.g. 1.64.)

Years 1-10 $18,200 (each year) Years 11-15 $5,250 (each year) Year 16-20 $1,980