Problem 24-5A Payback period, break-even time, and net present value LO P1, A1

Sentinel Company is considering an investment in technology to improve its operations. The investment will require an initial outlay of $252,000 and will yield the following expected cash flows. Management requires investments to have a payback period of 3 years, and it requires a 10% return on investments. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the table provided.)

Period	Cash Flow
1		$	47,300
2			52,000
3			76,900
4			95,100
5			125,900

Required: 1. Determine the payback period for this investment. 2. Determine the break-even time for this investment. 3. Determine the net present value for this investment.

Determine the payback period for this investment. (Enter cash outflows with a minus sign. Round your Payback Period answer to 1 decimal place.)

Year	Cash inflow (outflow)	Cumulative Net Cash Inflow (outflow)
0	$(252,000)
1
2		0
3		0
4		0
5		0
			0
Payback period =

Determine the break-even time for this investment. (Enter cash outflows with a minus sign. Round your break-even time answer to 1 decimal place.)

Year	Cash inflow (outflow)	Table factor	Present Value of Cash Flows	Cumulative Present Value of Cash Flows
0	$(252,000)
1
2
3				0
4				0
5				0
			0
Break-even time =

Determine the net present value for this investment.

Net present value