A manufacturing equipment investment of $250,000 is expected to generate the following cash flows over the next five years:
Yr Add’l Cash Sales Cost Savings Annual machine maintenance Expenses
1 $30,000 $4,000 $6,000
2 $35,000 $12,000 $15,000
3 $30,000 $10,000 $12,000
4 $35,000 $10,000 $14,000
5 $35,000 $10,000 $14,000

Required:
A. Draw a cash flow timeline for the proposal.
B. Compute payback period of the investment.
C. Should the investment be made if management wants to recover the initial investment in 2 years or less?