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A company is considering a capital investment of $45,000 in new equipment which will improve production and increase cash flows by $15,000 per year for 6 years. The payback period is years.

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abiolataiwo2015

Answer:

3 years

Explanation:

Calculation to determine The payback period

Using this formula

Payback period=Capital investment/ Increase cash flows

Let plug in the formula

Payback period=$45,000/$15,000

Payback period=3 years

Therefore The payback period is 3 years

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