1. A company with $800,000 in operating assets is considering purchasing a machine that costs $300,000 with an estimated salvage value of $40,000. The acquisition is expected to reduce operating costs by $55,000 in year 1, with a $5,000 increase in cost savings per year for each of the remaining years of its 6-year life. How long is the payback period?
2. A.5.7 yearsB.4.7 yearsC.5.5 yearsD.4.4 years