In January, Wilson Company Purchased a New Machine for $80,000

question 81

Multiple Choice

In January, Wilson Company purchased a new machine for $80,000 that has a useful life of 10 years and a terminal value of $5,000. Annual cash operating savings from the machine are $20,000. The income tax rate is 40%. What is the after-tax payback period?

• A) 4.00 years
• B) 5.26 years
• C) 4.85 years
• D) 6.67 years

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