Problem:
Creighton, 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 $424,386, $512,178, $561,755, $764,997, $816,500, and $825,375 over the next six years.
Required:
Question: What is the payback period, and does this investment meet the firm's payback criteria?
Note: Show all workings.