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Problem 24-5A Payback period, break-even time, and net present value LO P1, A1

Sentinel Company is considering an investment in technology to improve its operations. The investment will require an initial outlay of $252,000 and will yield the following expected cash flows. Management requires investments to have a payback period of 3 years, and it requires a 10% return on investments. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the table provided.)

Period	Cash Flow
1		$	47,300
2			52,000
3			76,900
4			95,100
5			125,900

Required: 1. Determine the payback period for this investment. 2. Determine the break-even time for this investment. 3. Determine the net present value for this investment.

Determine the payback period for this investment. (Enter cash outflows with a minus sign. Round your Payback Period answer to 1 decimal place.)

	Year Cash inflow (outflow) Cumulative Net Cash Inflow (outflow) 0 $(252,000) 1 2 0 3 0 4 0 5 0 0 Payback period =

Determine the break-even time for this investment. (Enter cash outflows with a minus sign. Round your break-even time answer to 1 decimal place.)

	Year Cash inflow (outflow) Table factor Present Value of Cash Flows Cumulative Present Value of Cash Flows 0 $(252,000) 1 2 3 0 4 0 5 0 0 Break-even time =

Determine the net present value for this investment.

	Net present value

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