Question - Lenitnes Company is considering an investment in technology to improve its operations. The investment will require an initial outlay of $250,000 and will yield the following expected cash flows. Management requires investments to have a payback period of three years, and it requires a 10% return on its investments.
Period Cash Flow
1 $ 125,000
2 94,000
3 75,000
4 52,000
5 47,000
Determine the payback period for this investment.