Birch manufacturing is considering the addition of another product line to its offerings.Equipment needed to produce the new line will cost $200,000.Birch estimates that the net cash inflows from the new product line will be as follows:
Required:
a.What is the payback period for the new product line?
b.If the company can establish a steady customer base before production starts and the cash inflows will be $15,000 per year for years 1 - 15,what will be the payback period?
Unit 9-4,
Definitions:
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