Given the Following Information and Assuming Straight-Line Depreciation to Zero

question 256

Multiple Choice

Given the following information and assuming straight-line depreciation to zero, what is the payback period for this project? Initial investment = $500,000; life = five years; cost savings = $160,000 per year; salvage value = $30,000 in year 5; tax rate = 34%; discount rate = 13%.

• A) 2.5 years
• B) 3.6 years
• C) 3.9 years
• D) 4.4 years
• E) The payback period is greater than the project's life.

---

Definitions:

Disinfection

The process of eliminating or reducing harmful microorganisms from inanimate objects and surfaces, except for bacterial spores.

Blood Pressure Cuffs

A device used in conjunction with a sphygmomanometer to measure arterial blood pressure.

Reflex Hammers

Tools used by medical professionals, particularly in neurology, to test deep tendon reflexes as a part of the neurological physical examination to detect abnormalities in the central or peripheral nervous system.

Ultrasonic Cleaning

A method of sanitization that involves placing instruments in a cleaning solution in a receptacle that generates sound waves through the cleaning solution, loosening contaminants. Ultrasonic cleaning is safe for even very fragile instruments.