A Company Is Considering the Purchase of a New Machine

question 112

Multiple Choice

A company is considering the purchase of a new machine for $48,000. Management predicts that the machine can produce sales of $16,000 each year for the next 10 years. Expenses are expected to include direct materials, direct labor, and factory overhead totaling $8,000 per year plus depreciation of $4,000 per year. The company's tax rate is 40%. What is the payback period for the new machine?

• A) 3.0 years.
• B) 6.0 years.
• C) 7.5 years.
• D) 12.0 years.
• E) 20.0 years.

Understand the rise in entrepreneurship education and the factors contributing to the increase in small business formation.

Describe the marketing concept focusing on consumer needs and organizational structure's impact on business success.

Identify the support structures available for small businesses, including SBA certification and the demographic shifts in business ownership.

Understand the importance of economies of scale in large businesses.

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Definitions:

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Erik Erikson

A developmental psychologist known for his theory on the psychosocial development of humans.