Answer:
2.505 Years
Step-by-step explanation:
Payback calculates the amount of time it takes to recover the amount invested in a project from it cumulative cash flows
cash flow = ne income + depreciation
Straight line depreciation expense = (Cost of asset - Salvage value) / useful life
60,000 / 5 = $12,000
Cash flows :
Year 1 = 15900
Year 2 = 21900
Year 3 = 44,000
Amount recovered in year 1 = $-60,000 + 15900 = -44,100
Amount recovered in year 2 = -44,100 + 21900 = -22.200
Amount recovered in year 3 = - 22,200 + 44,000 = 21800
payback = 2 years + 22,200 /44,000 = 2.505 years