question archive Mega Company is considering the purchase of a new machine
Mega Company is considering the purchase of a new machine
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Mega Company is considering the purchase of a new machine. The invoice price of the machine is $81,120, freight charges are estimated to be $3,120, and installation costs are expected to be $6,500. The annual cost savings are expected to be $26,000 for 10 years. Calculate the cash payback period. (Round answer to 2 decimal places, e.g. 15.25.) Cash payback period years
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Answer:
| Invoice price | 81120 | |
| Add: Freight costs | 3120 | |
| Installation costs | 6500 | |
| Investment cost | 90740 | |
| Investment cost | 90740 | |
| Divided by Annual Cost savings | 26000 | |
| Cash payback period | 3.49 | years |
