Payback Period

Britannia Private Limited Co$.$ is a successful biscuit manufacturer. The company$$s product director has come to the board with a proposal to expand into chocolate$-$coated biscuits. For this, the company needs to purchase new machinery, for which the initial cost will be $5,75,000.$ The finance director and the product director meet to discuss sales projections for the new range of chocolate$-$coated biscuits. They forecast the following net cash inflows over the five$-$year period before the machinery needs to be replaced.

Year Cash Inflow $($in $)$

Year $1135000$

Year $2147000$

Year $3152000$

Year $4155000$

Year $5155000$

Calculate the payback period for this proposal in years.