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d. 12.10 years e. 3.01 years A company is planning to purchase a machlne that will cost $57,000 with a six-year life and no salvage
d. 12.10 years
e. 3.01 years
A company is planning to purchase a machlne that will cost $57,000 with a six-year life and 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 before taxes Income tax (35%) Net income $ 138,000 $68,000 9,500 46,000 (123,500) $14,500 5,075 $ 9,425 Multiple Choice 6.00 years 1.99 year. 6.05 yearsStep by Step Solution
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