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Feel the Groove, Inc. is considering purchasing a new piece of equipment which would have an initial cost of $1,000,000 and a 5 year useful
Feel the Groove, Inc. is considering purchasing a new piece of equipment which would have an initial cost of $1,000,000 and a 5 year useful life. There is no salvage value for the equipment. The increase in cash flow each year of the equipment's useful life would be as follows: Year 1 $375,000 $350,000 $285,000 Year 2 Year 3 Year 4 $230,000 $185,000 Year 5 What is the payback period? 02.96 years 3.51 years O 3.00 years 2.39 years
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