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Payback Period of Purchase

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Can you please help me find the payback period for the following?
I am considering the purchase of new Garland brand energy-efficient refrigerators for a chain of 60 restaurants. These new refrigerators will cost $10,000 each and will have useful lives of five years before they will need to be replaced. Installation of the total set of 60 refrigerators will cost $100,000. I have gathered information from other companies that have purchased these refrigerators and is confident they will produce a company wide, net cost saving of $200,000 per year. What is the payback period?

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The solution contains step-by-step calculations to determine payback period for the energy-efficient refrigerators.

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