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Oriental Corporation has gathered the following data on a proposed investment project:

Oriental Corporation has gathered the following data on a proposed investment project:

 

 Investment in depreciable equipment$450,000 Annual net cash flows $90,000 Life of the equipment 10yearsSalvage value$0 Discount rate 7%

 

The company uses straight-line depreciation on all equipment. Assume cash flows occur uniformly throughout a year except for the initial investment.

 

The payback period for the investment would be:

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