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A company is planning to purchase a machine that will cost $53,172, have a six-year life, and will have no salvage value. The company
A company is planning to purchase a machine that will cost $53,172, have a six-year life, and will have no salvage value. The company expects to sell the machine's output of 3,000 units evenly throughout each year. A projected income statement for each year of the asset's life appears below. What is the payback period for this machine? Sales Costs: Manufacturing Depreciation on machine Selling and administrative expenses Income $ 113,400 4,000 63,000 $ 189,000 (180,400) $ 8,600
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