Reference: 10-12 Hanley Company Purchased a Machine for $125,000 That Will Be

question 96

Multiple Choice

Reference: 10-12
Hanley Company purchased a machine for $125,000 that will be depreciated on the straight-line basis over a five-year period with no salvage value. The related cash flow from operations is expected to be $45,000 a year. These cash flows from operations occur uniformly throughout the year.
-What is the payback period closest to?

• A)2.8 years.
• B)4.2 years.
• C)2.1 years.
• D)2.3 years.