10. What is a payback period? __________________________________________________________________________________________________________________________________________________________________________

Alpha Company invested $30,000 in new equipment. The more efficient new equipment was expected to reduce operating cash outflows over the next four years by the following:

Year 1 Year 2 Year 3 Year 4

$9,000 $7,000 $6,000 $5,000

Using the averaging method, the payback period for the investment is: