The Keego Company is planning a $200,000 equipment investment that has an estimated five-year life with no estimated salvage value.
The company has projected the following annual cash flows for the investment:
|
Year |
Cash Inflows |
|
1 |
$120,000 |
|
2 |
60,000 |
|
3 |
40,000 |
|
4 |
40,000 |
|
5 |
40,000 |
|
Total |
$300,000 |
Assuming that the cash inflows occur evenly over the year, the payback period for the investment is _______ years.