What is the payback period


Summit Corp is considering the purchase of a new piece of equipment. The cost savings from the equipment would result in an annual increase in net income after tax of $175,000. The equipment will have an initial cost of $451,000 and have a 15 year life. If the salvage value of the equipment is estimated to be $76,000, what is the payback period?

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Accounting Basics: What is the payback period
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