The management of Iroquois National Bank is considering an investment in automatic teller machines. The machines would cost $170,200 and have a useful life of seven years. The banks controller has estimated that the automatic teller machines will save the bank $37,000 after taxes during each year of their life (including the depreciation tax shield). The machines will have no salvage value. Use Appendix A for your reference. (Use appropriate factor(s) from the tables provided.)

Exercise 16-36 Part 1

Required: 1. Compute the payback period for the proposed investment. (Round your answer to 1 decimal place.)