A Company with $600,000 in Operating Assets Is Considering the Purchase

question 68

Multiple Choice

A company with $600,000 in operating assets is considering the purchase of a machine that costs $72,000 and which is expected to reduce operating costs by $18,000 each year. These reductions in cost occur evenly throughout the year. The payback period for this machine in years is closest to:

• A)4 years
• B)8.3 years
• C)0.25 years
• D)33.3 years

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Definitions:

Well-being

A holistic term encompassing the physical, psychological, and social aspects of a person's health and happiness.

Retirement

The period in life when an individual stops working full-time or leaves the workforce entirely, often due to age.

Work Role

The function or duties that an individual is assigned to perform in a professional environment or job setting.

Granddaughters

Female grandchildren, being the daughters of one's son or daughter.