A company is considering a new machine that costs $100,000. The machine is expected to last 5 years and provide $20,000 in net cash flows annually. Should the machine be purchased if the company's maximum payback period is 3 years? a. Yes, because the machine will provide $100,000 in total net cash flows. b. Yes, because the payback period is 5 years, which is the life of the machine. c. No, because the amount of the net cash flow is the same every year instead of growing. d. No, because the payback period of 5 years is more than the maximum
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