Home Grown Inc., a local plant nursery, is considering purchasing a new plot of land for their business for $400,000. The land would allow Home Growers to increase their pre-tax cash flows by $120,000 each year. The company would plan to keep the land for 20 years before selling it for $400,000.
Because the land is real property, the company would not take any related depreciation. Home Grown's tax rate is 25%, and the required rate of return is 9%.
What is the Cash Payback Period of the proposed investment?

Question

Home Grown Inc., a local plant nursery, is considering purchasing a new plot of land for their business for $400,000. The land would allow Home Growers to increase their pre-tax cash flows by $120,000 each year. The company would plan to keep the land for 20 years before selling it for $400,000. 
Because the land is real property, the company would not take any related depreciation. Home Grown's tax rate is 25%, and the required rate of return is 9%.
What is the Cash Payback Period of the proposed investment?

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The Answer of Home Grown Inc., a local plant nursery, is considering purchasing a new plot of land for their business for $400,000. The land would allow Home Growers to increase their pre-tax cash flows by $120,000 each year. The company would plan to keep the land for 20 years before selling it for $400,000. 
Because the land is real property, the company would not take any related depreciation. Home Grown's tax rate is 25%, and the required rate of return is 9%.
What is the Cash Payback Period of the proposed investment?