Question: A new packaging machine will save Greene Cheese Ltd. $3000 per year in reduced spoilage, $2500 per year in labour, and $1000 per year

A new packaging machine will save Greene Cheese Ltd. $3000 per year

A new packaging machine will save Greene Cheese Ltd. $3000 per year in reduced spoilage, $2500 per year in labour, and $1000 per year in packaging material. The new machine will have additional expenses of $700 per year in maintenance and $200 per year in energy. If it costs $20 000 to purchase, what is its payback period? Assume that the savings are earned throughout the year, not just at year end.

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