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Palmer Corp. is considering the purchase of a new piece of equipment. The cost savings from the equipment would result in an annual increase in

Palmer Corp. 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 $197,000. The equipment will have an initial cost of $414,000 and have a 8 year life. If the salvage value of the equipment is estimated to be $78,000, what is the payback period?

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