5.

Belmont Corp. is considering the purchase of a new piece of equipment. The cost savings from the equipment would result in an annual increase in net income after tax of $234,000. The equipment will have an initial cost of $1,056,000 and have an 8-year life. If there is no salvage value of the equipment, what is the payback period?

Multiple Choice

• 4.51 years

• 8.00 years

• 1.77 years

• 2.89 years