Question: A firm is considering a new inventory system that will cost $110,000. The system is expected to generate positive cash flows over the next four

A firm is considering a new inventory system that will cost $110,000. The system is expected to generate positive cash flows over the next four years in the amounts of $35,000 in year 1, $55,000 in year 2, $65,000 in year 3, and $40,000 in year 4. The firms required rate of return is 12%. What is the payback period of this project?

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