Use the Following Information for Questions

question 47

Multiple Choice

Use the following information for questions
A company is considering purchasing factory equipment that costs $480,000 and is estimated to have no salvage value at the end of its 8-year useful life. If the equipment is purchased, annual revenues are expected to be $135,000 and annual operating expenses exclusive of depreciation expense are expected to be $39,000. The straight-line method of depreciation would be used.
-The cash payback period on the equipment is

• A) 13.3 years.
• B) 8.0 years.
• C) 5.0 years.
• D) 2.5 years.

---

Definitions:

Fraudulent Activity

Any wrongful or criminal deception intended to result in financial or personal gain.

Staging An Accident

The act of deliberately causing or fabricating an accident, often for the purpose of financial gain, such as making a fraudulent insurance claim.

Damages

Financial compensation or restitution awarded in response to injury, loss, or infringement of rights incurred by a party due to another's actions.

Technical Jargon

Specialized language used by experts in a particular field that may be difficult for others outside the field to understand.