Question: payback comparisons Nova Products has a 5 5-year maximum acceptable payback period. The firm is considering the purchase of a new machine and must choose

payback comparisonsNova Products has a 5

5-year maximum acceptable payback period. The firm is considering the purchase of a new machine and must choose between two alternatives. The first machine requires an initial investment of $14 comma 000

14,000 and generates annualafter-tax cash inflows of $3 comma 000

3,000 for each of the next 7

7 years. The second machine requires an initial investment of $21 comma 000

21,000 and provides an annual cash inflow after taxes of $4 comma 000

4,000 for 20

20 years.

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