Answer
The cashback period for the equipment is 9 years.
Work Step by Step
The cashback period is the cost of os capital investment divided by the net annual cash flow.
Formula:
$\frac{Cost of Capital}{Net Annual Cash flow}=Cash payback Period $
So, Now substituting the $450000 capital investment and the $50000
net annual flow to determine the cash payback the period in the above formula get :
Cash payback period=Cost of capital investment / Net annual cash flow
= $450000/50000
=9 years
The cashback period for the equipment is 9 years.
