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Wright Corp. is considering the purchase of a new piece of equipment, which would have an initial cost of $1,000,000 and a 5-year life. There
Wright Corp. is considering the purchase of a new piece of equipment, which would have an initial cost of $1,000,000 and a 5-year life. There is no salvage value for the equipment. The increase in cash flow each year of the equipment's life would be as follows:
|
| |
Year 1 | $ | 380,000 |
Year 2 | $ | 355,000 |
Year 3 | $ | 290,000 |
Year 4 | $ | 235,000 |
Year 5 | $ | 190,000 |
|
What is the payback period?
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