Calculate the payback period for the tractor investment

Reference no: EM131931400

Problem

Nixon Harvesting is considering the purchase of a new tractor. The tractor costs $280, 824, and has a 5-year life. The company uses the straight-line depreciation method, and the tractor has no residual value. The tractor will produce net cash inflows of $66, 667 per year at the end of each year. For purposes of responding to each requirement below, you may assume no income taxes. Calculate the payback period for the tractor investment.

Reference no: EM131931400

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