Determine payback period assuming inflation is negligible

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Question 1: An investment that costs $120,000 is estimated to reduce cash operating costs by $40,000 per year for 4 years. The required rate of return is 10 percent. Determine the payback period, assuming inflation is negligible.

Option 1: About 2.92 years
Option 2: About 2.66 years
Option 3: About 3 years
Option 4: About 2.79 years

Reference no: EM132813050

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