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What is the payback period for the project

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Question: McGilla Golf has decided to sell a new line of golf clubs. The length of this project is seven years. The company has spent $125,001 on research and development for the new clubs. The plant and equipment required will cost $2,842,143 and will be depreciated on a straight-line basis. The new clubs will also require an increase in net working capital of $134,666 that will be returned at the end of the project. The annual OCF of the project will be $816,454. The tax rate is 30 percent, and the cost of capital is 13 percent. What is the payback period for this project? (Do not round intermediate calculations and round your final answer to 2 decimal places.)

Reference no: EM132760283

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