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Womark Company purchased a new machine on January 1 of this year for P90,000, with an estimated useful life of 5 years and a salvage
Womark Company purchased a new machine on January 1 of this year for P90,000, with an estimated useful life of 5 years and a salvage value of P10,000. The machine will be erations, net of income taxes, of P36,000 a year in each of the next 5 years. The new machines salvage value is P20,000 in years 1 and 2, and P15,0000 in years 3 and 4. What will be the bailout period (rounded) for the new machine?
a. 1.4 years.
b. 3.4 years.
c. 2.2 years.
d. 1.9 years.
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