Lindor Chocolate Company produces high quality chocolate. The company 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 $148,400. The equipment will have an initial cost of $530,000 and have a 5-year life. If the salvage value of the equipment is estimated to be $12,000, what is the annual net cash flow?

Fisherman John's provides high quality fishing equipment for the community. The shop is considering the purchase of a new piece of equipment, which would have an initial cost of $545,000, a 7-year life, and $150,000 salvage value. The increase in cash flow each year of the equipment's life would be as follows:

Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 $114,000 $106,000 $104,000 $ 93,000 $ 90,000 $ 85,000 $ 79,000 What is the payback period