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Author Question: Birch manufacturing is considering the addition of another product line to its offerings. Equipment ... (Read 13 times)

yulisa3298

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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 annual cash inflows from the new product line will be as follows:

Years 1-10$18,000
Years 11-155,000
Year 16-20$2,000

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, with years 16 through 20
remaining at $2,000 annually, what will be the payback period?


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Marked as best answer by yulisa3298 on Feb 5, 2023

Jim457

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yulisa3298

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Reply 2 on: Feb 5, 2023
Thanks for the timely response, appreciate it


Dnite

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Reply 3 on: Yesterday
YES! Correct, THANKS for helping me on my review

 

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