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Sagot :
The equal annual cash flows come out to be $6,400 when the payback period is 5.25 years and the cost of equipment is $33,600.
What is a payback period?
The payback period is a method of capital budgeting that tells about how many years the invested amount is recovered back.
Given values:
Payback period: 5.25 years
Cost of equipment: $33,600
Computation of equal annual cash flows:
[tex]\rm\ Equal \rm\ annual \rm\ cash \rm\ flows=\frac{\rm\ Cost \rm\ of \rm\ equipment}{\rm\ Payback \rm\ period} \\\rm\ Equal \rm\ annual \rm\ cash \rm\ flows=\frac{\$33,600}{5.25 years} \\\rm\ Equal \rm\ annual \rm\ cash \rm\ flows=\$6,400[/tex]
Therefore, when the investment in equipment is $33,600 and the payback period is 5.25 years then the annual cash flows come out to be $6,400.
Learn more about the payback period in the related link:
https://brainly.com/question/17110720
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