Paramount Carpets Is Considering Purchasing New Equipment Costing $736,000 Considering the Residual Value Is Zero,calculate the Payback Period

Paramount Carpets is considering purchasing new equipment costing $736,000.The company's management has estimated that the equipment will generate cash flows as follows: $$\begin{array} { | r | r | } \hline \text { Year } 1 & \$ 218,000 \\\hline 2 & 218,000 \\\hline 3 & 260,000 \\\hline 4 & 260,000 \\\hline 5 & 168,000 \\\hline\end{array}$$ Considering the residual value is zero,calculate the payback period.(Round your answer to two decimal places.)

A) 4.39 years
B) 3.15 years
C) 3.62 years
D) 3.81 years

Correct Answer:

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