A company is considering the purchase of a new piece of equipment for P900,000. Predicted annual cash inflows from this investment are P360,000 (year 1), P300,000 (year 2), P180,000 (year 3), P150,000 (year 4) and P60,000 (year 5). The payback period is:

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A: Given:

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Q: Calculate the payback period

A: Payback period is the number of period in which the aount invested shall be recovered through income…