Oriental Corporation has gathered the following data on a proposed investment project:

Investment in depreciable equipment	$	460,000
Annual net cash flows	$	77,000
Life of the equipment		16	years
Salvage value	$	0
Discount rate		12	%

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 would be: (Round your answer to 1 decimal place.)

Brewer_8e_Rechecks_2019_10_14

Multiple Choice

• 0.2 years

• 1.0 years

• 4.0 years

• 6.0 years