You have been asked to analyze a capital investment project for a new machine. The machine will cost $400,000, have an 8-year life and a salvage of $80,000. The new machine will generate annual net cash flows of $120,000. The payback period is:

Multiple Choice

A. 3.25 years.

B. 3.33 years.

C. 3.50 years.

D. 3.67 years.

Answer rating: 100% (QA)

The payback period is the time it takes for the initial investment to be rec... View the full answer