A Company Is Considering Purchasing a Machine for $21,000

question 32

Multiple Choice

A company is considering purchasing a machine for $21,000. The machine will generate an after-tax net income of $2,000 per year. Annual depreciation expense would be $1,500. What is the payback period for the new machine?

• A) 4 years.
• B) 6 years.
• C) 10.5 years.
• D) 14 years.
• E) 42 years.

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Definitions:

Testes

Male reproductive glands responsible for producing sperm and male sex hormones, primarily testosterone.

Pubic Hair

Coarse body hair that develops in the genital region as a secondary sex characteristic during puberty.

Fertility Problems

Refers to difficulties in conceiving a child, which can result from issues in either the male or female reproductive systems.

Epididymis

A long, coiled tube that stores sperm and transports it from the testes, playing a key role in male reproductive system.