The Higgins Company has just purchased a piece of equipment at a cost of $140,00

Question

The Higgins Company has just purchased a piece of equipment at a cost of $140,000. This equipment will reduce operating costs by $66,000 each year for the next nine years. This equipment replaces old equipment which was sold for $8,000 cash. The new equipment has a payback period of: (Ignore income taxes.) (Round your answer to 1 decimal place.)

The Higgins Company has just purchased a piece of equipment at a cost of $140,000. This equipment will reduce operating costs by $66,000 each year for the next nine years. This equipment replaces old equipment which was sold for $8,000 cash. The new equipment has a payback period of: (Ignore income taxes.) (Round your answer to 1 decimal place.)

Explanation / Answer

c) 11.0 years

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