Caliber Lawnmowers Is Considering the Purchase of a New Machine

question 33

Multiple Choice

Caliber Lawnmowers is considering the purchase of a new machine costing $804,000.The company's management is estimating that the new machine will generate additional cash flows of $180,000 a year for ten years and have a residual value of $62,000 at the end of ten years.What is the machine's payback period? (Round your answer to two decimal places.)

• A) 4.47 years
• B) 7.29 years
• C) 3.33 years
• D) 4.32 years

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