Renzoni Incorporated, has invested in new pasta manufacturing equipment at a cost of $72,000. The equipment has an estimated useful life of eight years. Estimated annual sales and operating expenses related to the pasta equipment follow: Annual sales Labor costs Depreciation of equipment Operating income Income taxes Net income The estimated payback of the investment in the pasta equipment is: Multiple Choice 3.0 years. $ 132,000 (108,000) (9,000) $ 15,000 (6,000) $ 9,000 4.0 years.

Renzoni Incorporated, has invested in new pasta manufacturing equipment at a cost of $72,000. The equipment has an estimated useful life of eight years. Estimated annual sales and operating expenses related to the pasta equipment follow: The estimated payback of the investment in the pasta equipment is: Multiple Choice 30 years: 4.0 years