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X Company must purchase a new delivery truck and is using the payback method to evaluate two possible trucks. Truck 1 costs $35,000; Truck 2

X Company must purchase a new delivery truck and is using the payback method to evaluate two possible trucks. Truck 1 costs $35,000; Truck 2 costs $38,000. The useful life of both is seven years, with the following estimated operating cash flows:

Year Truck 1 Truck 2
1 $-6,000 $-7,000
2 -8,000 -4,000
3 -8,000 -3,000
4 -8,000 -3,000
5 -6,000 -3,000
6 -5,000 -2,000
7 -4,000 -2,000

If X Company chooses Truck 2 instead of Truck 1, what is the payback period (in years)?

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