Digger Company is evaluating an investment of $330,000 in earth moving equipment. Management anticipates net cash savings of $100,000 in year 1. The savings will increase by 40% in year 2 and then...

Digger Company is evaluating an investment of $330,000 in earth moving equipment. Management anticipates net cash savings of $100,000 in year 1. The savings will increase by 40% in year 2 and then increase by another 50% in year 3. The minimum desired rate of return is 15%.

Required:

What is the payback period for this investment?