Calculate the payback period for Investment B. (Round your answer to two decimal places.)
Arrendo, Inc. is evaluating two possible investments in depreciable plant assets. The company uses the straight-line method of depreciation. The following information is available:
A) 3.46 years
B) 1.94 years
C) 2.89 years
D) 3.82 years
A) 3.46 years
Payback for Investment B = Amount invested / Expected annual net cash flow
= $159,000 / $46,000 = 3.46 years
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