Question: your firm is purchasing a specialized machine that improves the efficiency. The machine costs $491,000. With this machine the firm expects its cash flows to

your firm is purchasing a specialized machine that improves the efficiency. The machine costs $491,000. With this machine the firm expects its cash flows to increase by $64,000 a year for the next two years and by $98,000 a year for the following three years. How long must the firm wait until it recovers all of its initial investment in this machine?

Multiple Choice

4.46 years
3.97 years
The project never pays back.
4.18 years
4.70 years

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