CrimsonCompany Is Considering the Purchase of a Computerized Manufacturing System

Multiple Choice

CrimsonCompany is considering the purchase of a computerized manufacturing system. The after-tax cash benefits/savings associated with the system are as follows: $$\begin{array} { l r } \text { Decreased waste } & \$ 150,000 \\\text { Increased quality } & 450,000 \\\text { Decrease in operating costs } & 300,000 \\\text { Increase in on-time deliveries } & 100,000\end{array}$$ The system will cost $10,000,000 and will last eleven years. The company's cost of capital is 9 percent. What is the payback period for the computerized manufacturing system?

A) 10.00 years
B) 12.00 years
C) 9.00 years
D) 20.00 years