Palmer corp is considering the purchase of a new piece of equipment. the cost savings from the equipment would result in an annual increase in net income after tax of "$100,000" . the equipment will have an initial cost of "$400,000" and have a "7" year life. if the salvage value of the equipment is estimated to be "$75,000" , what is the payback period

4 years

Explanation:

Payback period is the time in which a project returns back the initial investment in the form of net cash flow.

Initial Investment = $400,000

Annual increase in net Income = $100,000

Payback period = Initial Investment / Annual increase in net income

Payback period = $400,000 / $100,000

Payback period = 4 years

The initial cost of $400,000 will be paid back in only 4 years time by the equipment.

forbearance of student loan payments. under forbearance, your loan payments are postponed (or reduced) but interest continues to accrue during the period of forbearance. if you don't pay the interest during that period, the interest may be “capitalized,” which means it is added to your principal balance.