An Anticipated Purchase of Equipment for $1,000,000, with a Useful

Multiple Choice

An anticipated purchase of equipment for $1,000,000, with a useful life of 8 years and no residual value, is expected to yield the following annual net incomes and net cash flows: ? $$\begin{array} { c r r } \text { Year } & \text { Net Income } & \text { Net Cash Flow } \\1 & \$ 210,000 & \$ 400,000 \\2 & 180,000 & 320,000 \\3 & 145,000 & 280,000 \\4 & 125,000 & 270,000 \\5 & 60,000 & 220,000 \\6 & 60,000 & 220,000 \\7 & 60,000 & 220,000 \\8 & 60,000 & 220,000\end{array}$$ ?
What is the cash payback period?

A) 5 years
B) 4 years
C) 6 years
D) 3 years