(Ignore income taxes in this problem.) Overland Corporation has gathered the following data on a proposed investment project:

Investment required in equipment $ 690,000 Annual cash inflows $ 76,000 Salvage value of equipment $ 0 Life of the investment 16 years Required rate of return 6 %

The company uses straight-line depreciation on all equipment. Assume cash flows occur uniformly throughout a year except for the initial investment.

The payback period for the investment is:

7.1 years

0.1 years

9.1 years

1.0 years