Ghost Company has a payback goal of three years on acquisitions of new equipment. A new piece of equipment that costs $360,000 and that has a five-year life is being considered. Straight-line (SL) depreciation will be used, with zero salvage value. Ghost is subject to a 57% combined income tax rate, t. To meet the company's payback goal, the equipment must generate reductions in annual cash operating costs of at least:

Multiple Choice

• $120,000.

• $78,960.

• $219,960.

• $65,040.

• $183,628