Fabricating Solutions Is Looking at the Financials for a CNC

Multiple Choice

Fabricating Solutions is looking at the financials for a CNC machine. The expected life cycle for the machine is 6 years. The initial projected product design costs are $725,000. Fabricating Solutions typically uses a discount rate of 14% for all new product financials.

-For the project, how long will it take to recover the initial investments using a discount rate of 17%?

A) Less than two years
B) Between two years and three years
C) Between three years and four years
D) Between four years and five years
E) More than five years