GuSont Inc. was considering an investment in the following project:

Required initial investment	$	970,000
Net annual after-tax cash inflow	$	161,000
Annual depreciation expense (($970,000 $159,000)/20 years)	$	40,550
Estimated salvage value	$	159,000
Life of the project in years		20

Multiple Choice

• 3.7 years.

• 4.6 years.

• 5.8 years.

• 6.0 years.

• 7.9 years.

Assume that cash inflows occur evenly throughout the year. The estimated payback period in years (rounded to one decimal place) for the proposed project i