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A company is considering purchasing factory equipment that costs $480,000 and is estimated to have no salvage value at the end of its 8-year useful
A company is considering purchasing factory equipment that costs $480,000 and is estimated to have no salvage value at the end of its 8-year useful life. If the equipment is purchased, annual revenues are expected to be $135,000 and annual operating expenses before depreciation expense are expected to be $57,000. The straight-line method of depreciation would be used. The cash payback period on the equipment is a 8.0 years b 13.3 years c 3.1 years d 6.15 years
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