Lindas Luxury Travel (LLT) is considering the purchase of two Hummer limousines. Various information about the proposed investment follows: Help LLT evaluate this project by calculating each of the following:

2. Payback period.

Initial investment (2 limos) Useful life $1,200,000 10 years $ 130,000 Salvage value Annual net income generated LLT's Cost of capital 108,000 14%