Question
(Ignore income taxes in this problem.) Buy-Rite Pharmacy haspurchased a small auto for delivering prescriptions. The auto waspurchased for $29,000 and will have a 6-year
(Ignore income taxes in this problem.) Buy-Rite Pharmacy haspurchased a small auto for delivering prescriptions. The auto waspurchased for $29,000 and will have a 6-year useful life and a$4,800 salvage value. Delivering prescriptions (which the pharmacyhas never done before) should increase gross revenues by at least$32,800 per year. The cost of these prescriptions to the pharmacywill be about $26,600 per year. The pharmacy depreciates all assetsusing the straight-line method. The payback period for the auto isclosest to: 4.7 years 5.5 years 3.9 years 4.3 years |
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