You have the opportunity to expand your business by purchasing new equipment for $189,000. You expect to incur fixed costs of $96,000 per year to use this new equipment, and you expect to incur variable costs in the amount of approximately 10% of annual revenues.

Required
1. Calculate the payback period for this investment assuming you will generate $140,000 in cash revenues every year.
2. Assume you expect the following revenue stream for this investment:

Based on this estimated revenue stream, what is the payback period for this investment?