mod 10 q5

Milling, Inc. is considering a new milling machine. The machine costs $125,000. They can received a $15,000 trade in allowance for the old milling machine. The new machine can be used to generate $35,500 in annual revenue. Cash operation expenses are estimated to be $14,500 per year. The machine has a useful life of 15 years and annual depreciation expense would be $9,500. What would be the payback period of the new machine? 5.952 years 5.238 years 10.869 years 9.565 years