Keltner Enterprises Is Considering Investing in a New Packing Machine

question 132

Multiple Choice

Keltner Enterprises is considering investing in a new packing machine.The new machine will provide annual cash operating inflows of $12,300 for 5 years.The cost of the machine is $42,300 and it can be sold at the end of its 5-year useful life for $6,800.Keltner's required rate of return is 10%.What is the packing machine's payback period?

• A) 3.44 years
• B) 2.89 years
• C) 3.99 years
• D) 7.69 years

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