Question: 1. A company is considering purchasing equipment costing $75,000. Future annual net cash flows from this equipment are $30,000, $25,000, $15,000, $10,000, and $5,000. The payback period is
(a) 4 years,
(b) 3.5 years, or
(c) 3 years.
2. Wenro Company is considering the purchase of an asset for $90,000. It is expected to produce the following net cash flows. The cash flows occur evenly throughout each year. Compute the payback period for this investment.
