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:

Marketing Messages

Marketing messages are communications designed to influence consumers' perceptions and behaviors, promoting products, services, or brands.

Purchasing Process

The series of steps taken by an organization to acquire goods or services, from the identification of needs to the receipt and approval of the purchase.

Benefits

Advantages or positive outcomes that result from a particular action or policy.

Particular Advantages

Specific benefits or positive aspects unique to a situation, method, or product.