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

question 74

Multiple Choice

Omaha Plating Corporation is considering purchasing a machine for $1,500,000.The machine will 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,under the assumption that cash inflows occur evenly throughout the year?

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

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