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NEED HELP. Answer is C. 6.5 years. Please show the computation. Thank you! A company is considering purchasing a machine that costs $400,000 and is
NEED HELP. Answer is C. 6.5 years. Please show the computation. Thank you!
A company is considering purchasing a machine that costs $400,000 and is estimated to have no salvage value at the end of its 8-year useful life. If the machine is purchased, annual revenues are expected to be $100,000 and annual operating expenses exclusive of depreciation expense are expected to be $25,000. The straight-line method of depreciation would be used. The cash payback period on the machine is
a. 8.0 years.
b. 7.5 years.
c. 6.5 years.
d. 3.2 years.
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