Question: *Separation machine would replace an old work phase and increase this phases capacity with 10%. *The new equipment would cost 225 000 , and its

*Separation machine would replace an old work phase and increase this phases capacity with 10%.

*The new equipment would cost 225 000 , and its lifetime is estimated as 7 years.

*The increase in capacity would cause extra revenue of 60 000 per year.

*Based on this information, calculate the payback time.

*Is this project justified, if the companys maximum payback time is 4 years?

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