crane company is considering purchasing new equipment for $331,200. it is expected that the equipment will produce net annual cash flows of $46,000 over its 10-year useful life. annual depreciation will be $33,120. compute the cash payback period. (round answer to 1 decimal place, e.g. 10.5.) cash payback period enter the cash payback period in years rounded to 1 decimal place years

The length of time needed to repay the initial monetary investment is known as the payback period. In other terms, it is the length of time that passes after a machine, facility, or other investment generates enough net income to pay its expenses.

How is the repayment period determined?

To figure out how to calculate payback time in practice, you only divide a project's initial cash investment by the amount of net cash it brings in annually.

The payback period for a project with equal yearly cash flows may be determined using the following formula: payback = cash of machine/annual cash flow.

Depreciation is excluded from the calculation of the yearly cash flows since it is a non-cash item. As such, the $33120 annual depreciation figure should not affect the payback period calculation, but instead, the $46,000 annual cash-flows will be used.

payback = 331200/46000

7.2years

Payback period will be 7.2years

To know more about payback period click:

brainly.com/question/13978071

#SPJ4