What is the payback period

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Question - Paramount Company is considering purchasing new equipment costing $800,000. The company's management has estimated that the equipment will generate cash flows as follows:

Year 1 $200,000

Year 2 200,000

Year 3 250,000

Year 4 250,000

Year 5 150,000

Residual value is zero. What is the payback period?

Reference no: EM133179814

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