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What is the payback period on the equipment

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Ataxia Fitness Center is considering an investment in some additional weight training equipment. The equipment has an estimated useful life of 10 years with no salvage value at the end of the 10 years. Ataxia expects net annual cash inflows of $54,000 from this equipment. Ataxia's internal rate of return on this equipment is 14%. Ataxia's discount rate is also 14%.

Question 1: What is the payback period on this equipment?

Reference no: EM132548603

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