The expected profits from a $52,000 investment are $8000 in Year 1, $12,000 in each of Years

Question:

The expected profits from a $52,000 investment are $8000 in Year 1, $12,000 in each of Years 2 to 5, and $6000 in each of Years 6 and 7.
a. What is the investment’s payback period?
b. If the firm’s required payback period is four years, will it make the investment?

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