Sullivan Company Is Considering the Purchase of a New Machine

question 69

Multiple Choice

Sullivan Company is considering the purchase of a new machine costing $80,000. Sullivan's management is estimating that the new machine will generate additional cash flows of $12,000 a year for ten years and have a salvage value of $3,000 at the end of ten years. What is the machine's payback period?

• A) 7 years
• B) 6.7 years
• C) 6 years
• D) 5.33 years

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Definitions:

Elastic Cartilage

A type of cartilage that contains elastic fibers, making it flexible and found in structures like the external ear.

Connective Tissue Proper

A category of connective tissue that includes loose (areolar, adipose, reticular) and dense (regular, irregular, elastic) types, serving various support, binding, and nutritional functions in the body.

Subtypes

Variants or specific categories within a broader classification, often used in discussing different strains of viruses or specific forms of receptors in biology.

Unidirectional Stress

Stress or force that is applied in only one direction, particularly in the context of materials science or mechanical engineering.