A Company Is Considering Purchasing a Machine for $21,000

question 32

Multiple Choice

A company is considering purchasing a machine for $21,000. The machine will generate an after-tax net income of $2,000 per year. Annual depreciation expense would be $1,500. What is the payback period for the new machine?

• A) 4 years.
• B) 6 years.
• C) 10.5 years.
• D) 14 years.
• E) 42 years.

---

Definitions:

Collaborative Process

A method in which two or more parties work together towards a common goal, often seen in creative, academic, and business contexts.

RKO Studio

An iconic American film production and distribution company known for its significant contributions to the film industry during the early to mid-20th century.

Jarring

Producing a harsh, discordant sound or a shocking and disturbing effect.

"Happy Ending"

An ending of a story where the characters achieve a desirable outcome, often associated with positive emotions and a sense of fulfillment.