Omaha Plating Corporation is considering purchasing a machine for $1,400,000. The machine is expected to generate a constant after-tax income of $100,000 per year for 13 years. The firm will use straight-line (SL) depreciation for the new machine over 12 years with no residual value.

What is the payback period for the new machine?

Multiple Choice

• 4 years.

• 5 years.

• 6 years.

• 10 years.

• 15 years.