Determine the payback period for an asset that has a first cost of ₹50,000, a salvage value of ₹10,000 any time within 10 years of its purchase, and generates income of ₹8,000 per year. The required return is 8\% per year.
The payback period is determined as:
Try n = 8: 0\neq +₹1,375.8
Try n = 7: 0\neq -₹2,513.8
Hence, n is between 7 and 8 years.