Problem:
It will cost $6,000 to acquire an ice cream cart. Cart sales are expected to be $3,600 a year for three years. After the three years, the cart is expected to be worthless as the expected life of the refrigeration unit is only three years.
Required:
Question: What is the payback period?
a. 1.67 years
b. 2.00 years
c. 1.82 years
d. 1.48 years
Note: Please provide through step by step calculations.