A Company with $810,000 in Operating Assets Is Considering the Purchase

question 155

Multiple Choice

A company with $810,000 in operating assets is considering the purchase of a machine that costs $86,000 and which is expected to reduce operating costs by $18,000 each year. These reductions in cost occur evenly throughout the year. The payback period for this machine in years is closest to (Ignore income taxes.) : (Round your answer to 1 decimal place.)

• A) 4.8 years
• B) 9.4 years
• C) 0.21 years
• D) 45 years

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