Professor K buys equipment for $260,000. The equipment will last for 10 years. The equipment will generate annual net operating income of $50,000, which includes depreciation of $23,600. The salvage value of the equipment at the end of its life will be $24,000. The cash inflows occur evenly throughout the year. The payback period of the equipment is closest to

Multiple Choice

• 5.2 years

• 4.2 years

• 9.8 years

• 3.5 years