Holland 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 $208,000. The equipment will have an initial cost of $756,000 and have a 6-year life. If there is no salvage value of the equipment, what is the payback period?

Multiple Choice

• 6.00 years

• 1.65 years

• 3.63 years

• 2.26 years