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A company is considering the purchase of new equipment for $480,000. The equipment will have a useful life of 4 years and no salvage value.
A company is considering the purchase of new equipment for $480,000. The equipment will have a useful life of 4 years and no salvage value. The company estimates that the new equipment will provide $30,000 of after-tax net income each year after deducting annual depreciation expense of $120,000. What is the payback period for the new equipment? Select one: O a. 3.2 years. o b. 4 years. O c. 12.2 years. O d. 16 years. O e. 16.2 years
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