Shields Company has gathered the following data on a proposed investment project: (Ignore income taxes in this problem.)

Investment required in equipment	$500,000
Annual cash inflows	$82,000
Salvage value	$0
Life of the investment	16 years
Required rate of return	9%

The company uses straight-line depreciation. Assume cash flows occur uniformly throughout a year except for the initial investment.

The payback period for the investment is closest to:

1.0 years

0.2 years

4.1 years

6.1 years

(Ignore income taxes in this problem.) A company with $900,000 in operating assets is considering the purchase of a machine that costs $92,000 and which is expected to reduce operating costs by $24,000 each year. These reductions in cost occur evenly throughout the year. The payback period for this machine in years is closest to:

0.26 years

3.8 years

9.8 years

37.5 years