Payback, even and uneven cash flows. You have the opportunity to expand your business by purchasing new equipment for $159,000. You expect to incur cash fixed costs of $96,000 per year to use this new equipment, and you expect to incur cash variable costs in the amount of 10% of cash revenues.1. Calculate the payback period for this investment assuming you will generate $140,000 in cash revenues every year.2. Assume you expect the following cash revenue stream for this investment:
Based on this estimated revenue stream, what is the payback period for thisinvestment?