Use the Information Below to Answer the Following Question(s)

question 104

Multiple Choice

Use the information below to answer the following question(s) .Saturn Ltd.wants to automate one of its production processes.The new equipment will cost $180,000.In addition, Saturn will incur installation and testing costs of $5,000 and $8,500 respectively.The expected life of the equipment is 8 years and the salvage value of the equipment is estimated at $18,000.The annual cash savings are estimated at $32,000.The company uses straight-line depreciation and has a required rate of return of 14%.Ignore income taxes.
-What is the payback period for the investment Saturn Ltd.is considering?

• A)5.63 years
• B)5.78 years
• C)6.05 years
• D)5.26 years
• E)The project does not payback.

---

Definitions:

Contemporary Times

The current or most recent period, characterized by modern or present-day conditions, technology, and society.

Youth Suicides

The act of deliberately ending one's own life by individuals who are under the age of 18.

Alienation

Not feeling in control and not feeling a part of a situation. This often results in a lack of self-realization and a feeling ofpowerlessness and hopelessness

Emile Durkheim

A French sociologist best known for his foundational work on social theory, who explored the complex relationship between individuals and society.