A Company Is Considering the Purchase of a New Machine

question 79

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 $12,000 per year including depreciation of $3,000 per year. The company's tax rate is 40%.
-What is the payback period for the new machine?

• A) 8.9 years.
• B) 12.0 years.
• C) 20.0 years.
• D) 6.0 years.
• E) 7.5 years.

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Definitions:

User Design

The process of designing products, systems, or services with the focus on the users' experience and interaction.

Messaging Efficiency

The effectiveness of a communication in achieving its intended purpose with clarity and conciseness.

Effective Messaging

The creation and delivery of messages in a way that clearly conveys the intended information or persuasion to the target audience.

Multidimensional Medium

A platform or format that incorporates multiple forms of media or dimensions of information.