Omaha Plating Corporation Is Considering Purchasing a Machine for $1,500,000

question 6

Multiple Choice

Omaha Plating Corporation is considering purchasing a machine for $1,500,000. The machine is expected to generate a constant after-tax income of $100,000 per year for 15 years. The firm will use straight-line (SL) depreciation for the new machine over 10 years with no residual value.

What is the payback period for the new machine?

• A) 4 years.
• B) 5 years.
• C) 6 years.
• D) 10 years.
• E) 15 years.

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Definitions:

Strawberry

A sweet, red, heart-shaped fruit known for its juicy texture and distinctive aroma, belonging to the genus Fragaria.

Vanilla

Often used to describe something that is standard, basic, or without any special features or enhancements, especially in the context of food, sexual preferences, or software.

Fish

Aquatic, gilled vertebrates typically covered with scales and equipped with two sets of paired fins and several unpaired fins.

Intermodal Perception

The developmental ability to integrate and coordinate information from two or more sensory modalities, such as sight and sound.