Pique Corporation wants to purchase a new machine for $280,000. Management predicts that the machine can produce sales of $200,000 each year for the next 4 years. Expenses are expected to include direct materials, direct labor, and factory overhead (excluding depreciation) totaling $77,000 per year. The firm uses straight-line depreciation with no residual value for all depreciable assets. Pique's combined income tax rate is 40.00%. Management requires a minimum after-tax rate of return of 10.00% on all investments.
What is the present value payback period, rounded to one-tenth of a year? Use Excel PV in your calculations.
3.6
3.2
3.4
3.0
3.8