Problem:
AMP, Inc., has invested $2,165,800 on equipment. The firm uses payback period criteria of not accepting any project that takes more than four years to recover costs. The company anticipates cash flows of $436,386, $512,178, $564,755, $764,997, $816,500, and $825,375 over the next six years.
Required:
Question: What is the payback period?
Note: Provide support for your rationale.