Answer :
The cash payback period for the machine is 1.3 years.
What is cash payback period?
The cash payback period is a measure of the time it takes for the cash inflows from an investment to equal the initial cash outflow. It is a simple and easy-to-use measure of the profitability of an investment and is often used to evaluate the feasibility of a project or investment.
To calculate the estimated cash payback period for the machine, we need to determine the total net cash flows for the machine over its useful life and then divide this amount by the annual net cash flow.
First, we can calculate the total net cash flows for the machine by subtracting the initial cost of the machine ($409,370) from the sum of the annual net cash flows over the useful life of the machine:
Total net cash flows = ($87,100 x 6 years) - $409,370
= $522,600 - $409,370
= $113,230
Next, we can divide the total net cash flows by the annual net cash flow to determine the payback period:
Payback period = $113,230 / $87,100 per year
= 1.3 years
Hence, the estimated cash payback period for the machine is 1.3 years.
To learn more about cash payback period from the given link:
https://brainly.com/question/23149718
#SPJ4
