The net initial investment for a piece of construction equipment is $1,000,000

ACCOUNTING

Multiple Choice

The net initial investment for a piece of construction equipment is $1,000,000. Annual cash inflows are expected to increase by $200,000 per year. The equipment has an 8-year useful life. What is the payback period?

a. 8.00 years

b. 7.00 years

c. 6.00 years

d. 5.00 years

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