Problem:
DIY Construction Co is considering a new inventory system that will cost $750000. The system is expected to generate positive cash flows over the next four years in the amounts of $350000 in year one, $325000 in year two, $150000 in year three, and $180000 in year four. DYI's required rate of return is 8%.
Required:
Question: What is the payback period of this project?
Note: Provide support for your underlying principle.