E3-49

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 $295,000. 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 2.23 years O O 2.47 years 3.58 years O O 8.00 years