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What is the payback period for the proposed project

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Question - Dew Little Co. is considering opening a new plant to produce lawnmowers. The initial cost of the project is $6 million. This cost will be depreciated straight-line to a zero book value over the 15-year life of the project. The net income of the project is expected to be $137,000 a year for the first four years and $538,000 for years 5 through 15, respectively. What is the payback period for the proposed project?

Reference no: EM132923573

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