Russell Corp

question 41

Multiple Choice

Russell Corp.is considering the purchase of a new machine for $76,000.The machine would generate an annual cash flow of $23,214 for five years.At the end of five years, the machine would have no salvage value.The company's cost of capital is 12 percent.The company uses straight-line depreciation with no mid-year convention. What is the payback period in years for the machine approximated to two decimal points, assuming no taxes are paid?

• A) 3.00
• B) 9.48
• C) 3.27
• D) 4.00

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Definitions:

Short-Term Actions

Initiatives or tasks that are planned to be completed in a relatively brief period, usually aimed at addressing immediate needs or goals.

Long-Term Solutions

Strategies or answers to problems that are designed to be effective over an extended period, rather than quick fixes.

Task

A piece of work to be done or undertaken, often with a specific objective in mind.

Technology

The application of scientific knowledge for practical purposes, especially in industry.