Sentinel Company is considering an investment in technology to improve its opera

Question

Sentinel Company is considering an investment in technology to improve its operations. The investment will require an initial outlay of $253,000 and will yield the following expected cash flows. Management requires investments to have a payback period of 3 years, and it requires a 9% return on investments.

Determine the payback period for this investment. (Round your answer to 1 decimal place.)

Determine the break-even time for this investment. Use the Table B.1. (Round "PV Factor" to 4 decimal places. Round your answer to 1 decimal place.)

Determine the net present value for this investment. Use the Table B.1. (Round "PV Factor" to 4 decimal places. Round your answer to the nearest dollar amount. Omit the "$" sign in your response.)

Period Cash Flow 1 $ 47,900     2 53,000     3 76,300     4 95,800     5 125,100    

Explanation / Answer

Payback period = 3.8 years

Breakeven = 2.93 years **Not 100% sure how to use the table...

NPV = $43645.14

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