Hazard company is considering the acquisition of a machine that costs $420,000.

Question

Hazard company is considering the acquisition of a machine that costs $420,000. The machine is expected to have a six year useful life, no residual value, annual net cash flows of 150,000 and an average annual operating income of 87500. What is the payback period for the machine?
A. 2.8 years B. 3 years C. 4.8 years D. 2.5 years Hazard company is considering the acquisition of a machine that costs $420,000. The machine is expected to have a six year useful life, no residual value, annual net cash flows of 150,000 and an average annual operating income of 87500. What is the payback period for the machine?
A. 2.8 years B. 3 years C. 4.8 years D. 2.5 years
A. 2.8 years B. 3 years C. 4.8 years D. 2.5 years

Explanation / Answer

Answer is 2.8 years

420000/150000 =2.8 years

Related Questions

Navigate

• Browse (All)
• Browse H
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.