A piece of equipment costs $30,000, and is expected to generate $8,500 of annual cash revenues and $1,500 of annual cash expenses. The disposal value at the end of the estimated 10-year life is $3,000. Ignoring income taxes, the payback period is:
A. 6.98 years.
B. 3.53 years.
C. 4.29 years.
D. 3.86 years.
E. Some other period of time not noted.
Answer: C
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