Medlab Inc is considering modernizing its production facility by investing in new equipment and selling the old equipment. The following information has been collected on this investment :

Depreciation is $10,090 per year for the old equipment. The straight-line depreciation method would be used for the new equipment over an eight-year period with salvage value of $4,600.

Determine the cash payback period. (Ignonre income taxes)

Old Equipment			New Equipment
Cost	$80,720		Cost	$38,400
Accumulated depreciation	$40,600		Estimated useful life	8 years
Remaining life	8 years		Salvage value in 8 years	$4,600
Current salvage value	$9,900		Annual cash operating costs	$29,700
Salvage value in years	$0
Annual cash operating costs	$35,400