Clinton Inc is considering the purchase of a new equipment costing $200,000. The equipment is expected to reduce annual operating costs by $70,000 and will be depreciated using the straight-line method (with no half-year convention) over five years with no salvage value at the end of its useful life. Assuming a 40 percent income tax rate, the equipment's payback period is:
A) 2.44 years.
B) 2.86 years.
C) 3.45 years.
D) 4.76 years.
C
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Indicate whether the statement is true or false.
Alex sees Mona's ring, and he thinks it is very valuable. He uses physical duress to cause her to give him the ring, and he quickly sells it to unsuspecting Hanna's Antique Jewelry Shop for $5,000 . A month later, Mona discovers her ring on sale at Hanna's. Can Mona get the ring back?
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What will be an ideal response?