Wright Corp. is considering the purchase of a new piece of equipment, which would have an initial cost of $1,000,000 and a 5-year life. There is no salvage value for the equipment. The increase in net income each year of the equipment's life would be as follows: Year 1$375,000Year 2$350,000Year 3$285,000Year 4$230,000Year 5$185,000What is the payback period?
A. 2.96 years
B. 2.06 years
C. 3.51 years
D. 1.77 years
Answer: D
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