What is the cash payback period

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Question - An anticipated purchase of equipment for $490,000 with a useful life of 8 years and no residual value is expected to yield the following annual net incomes and net cash flows:

Year

Net Income

Net Cash Flow

1

$60,000

$110,000

2

50,000

100,000

3

50,000

100,000

4

40,000

90,000

5

40,000

90,000

6

40,000

90,000

7

40,000

90,000

8

40,000

90,000

What is the cash payback period?

5 years

4 years

6 years

3 years

Reference no: EM132108996

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