Terrain Vehicle Has Received Three Proposals for Its New Vehicle

question 64

Essay

Terrain Vehicle has received three proposals for its new vehicle painting machine.Information on each proposal is as follows:
Annual cash saved by operations:
Salvage value end of year:
Required: Determine each proposals payback period.

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Definitions:

Multiplier

A factor by which an economic variable is multiplied to estimate its impact on other variables.

Salaries

Regular payments made by an employer to an employee, typically paid monthly or biweekly for professional or office work.

Social Security Credit

Based on total wages and self-employment income during the year; the amount of earnings it takes to earn a credit changes each year; in 2009, a person had to earn $1,090 in covered earnings to get one credit; people born after 1929 need 40 credits in their lifetime to qualify for Social Security benefits.

Earnings

The amount of profit that a company produces during a specific period, indicating the financial performance.