Jasper Company Has a Payback Goal of Three Years on Acquisitions

question 115

Multiple Choice

Jasper Company has a payback goal of three years on acquisitions of new equipment.A new piece of equipment that costs $450,000 and a five-year life is being considered.Straight-line (SL) depreciation will be used,with zero salvage value.Jasper is subject to a 40% income tax rate.To meet the company's payback goal,the equipment must generate reductions in annual cash operating costs of:

• A)$60,000.
• B)$114,000.
• C)$150,000.
• D)$190,000.
• E)$285,000.

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Definitions:

Two-factor Theory

Two-factor theory, also known as Herzberg's motivation-hygiene theory, posits that job satisfaction and dissatisfaction arise from two distinct sets of factors: motivators and hygiene factors.

Job Satisfaction

The level of contentment individuals feel with their job, including aspects like work responsibilities, environment, and compensation.

Interpersonal Relationships

Connections or associations between two or more people that can vary in duration and significance.

Relatedness Needs

Desires for satisfying interpersonal relationships.