A machine costs $5,240 and produces benefits of $1,000 at the end of each year for 8 years. assume an annual interest rate of 10%.
a) What is the payback period in years?
b) What is the breakeven point in years?
c) Since the answers in (a) and (b) are different, which one is “correct”?
machine costYear $ 5,240.00Benefitspresent value interest factor (10%)present value(PV1 $ 1,000.000.9090909091 $909.092 $ 1,000.000.826446281 $826.453 $ 1,000.000.7513148009 $751.314…