Vandezande Inc. is considering the acquisition of a new machine that costs $458,000 and has a useful life of 5 years with no salvage value. The incremental net operating income and incremental net cash flows that would be produced by the machine are (Ignore income taxes.):

 

                 Incremental Net Operating Income            Incremental Net Cash Flows

Year 1                          $66,000                                                        $150,000 

Year 2                           $72,000                                                       $152,000 

Year 3                          $83,000                                                         $165,000 

Year 4                          $46,000                                                         $148,000

Year 5                         $88,000                                                          $150,000 

 

Assume cash flows occur uniformly throughout a year except for the initial investment.

 

The payback period of this investment is: