The management of Zesty Corporation is considering the purchase of a new machine costing $400000 The companys desired rate of return is 10 The present value factors for $1 at compound interest of 10 f

To calculate the cash payback period, we need to determine how long it will take for the net cash flows to equal the initial investment of $400,000.

Year 1 net cash flow = $180,000 Year 2 net cash flow = $120,000 Year 3 net cash flow = $100,000 Year 4 net cash flow = $90,000 Year 5 net cash flow = $90,000

Cumulative net cash flow: Year 1 = $180,000 Year 2 = $300,000 Year 3 = $400,000 (payback achieved)

Therefore, the cash payback period for this investment is 3 years.

Answer: c. 3 years.