Christopher Electronics bought new machinery for 513500 mill

Christopher Electronics bought new machinery for 5,135,00 million. This is expected to result in additional cash flows of $1,205,000 million over the next 7 years. What is the payback period for this project? Their acceptance period is 5 years

Solution

payback period=initial investment/annual cash flows

which is equal to

=(5,135,000/1,205,000)

which is equal to

=4.26 year(Approx).