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.

---

Definitions:

Short-Term Memory

A limited-capacity store that can maintain unrehearsed information for about 20 to 30 seconds.

Phonological Loop

A component of working memory model that deals with the auditory information, playing a key role in the processing and storage of verbal and auditory data.

Visuospatial Sketchpad

A component of working memory responsible for the temporary storage and manipulation of visual and spatial information.

Short-Term Memory

The part of the memory system that is responsible for holding small amounts of information in an active, readily available state for a short duration.