Payback period of the investment

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Reference no: EM13147080

Hull Inc. is considering the acquisition of equipment that costs $200,000 and has a useful life of 6 years with no salvage value. The incremental net cash flows that would be generated by the equipment are:

Incremental net cash flows

Year1.......................$77,000
Year2.......................67,000
Year3.......................51,000
Year4.......................64,000
Year5.......................50,000
Year6.......................68,000

The payback period of this investment is closest to:

A) 2.8 years

B) 2.6 years

C) 3.1 years

D) 5.0 years

Reference no: EM13147080

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