Question: Rents Corp. is considering a project that would require an initial investment of $270,000 for a machine. The projects incremental annual cash inflows are $135,000

Rents Corp. is considering a project that would require an initial investment of $270,000 for a machine. The projects incremental annual cash inflows are $135,000 and incremental cash outflows are $51,000. Annual depreciation on the machine is $22,000.

The payback period of the investment is closest to:

Multiple Choice

2.00
5.29
2.65
3.21

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