A company is planning to purchase a machine that will cost $24,000 with a six-year life and no salvage value. The company expects to sell the machine's output of 3,000 units evenly throughout each year. A projected income statement for each year of the asset's life appears below. What is the payback period for this machine? Sales $90,000 Costs: Manufacturing$52,000 Depreciation on machine 4,000 Selling and administrative expenses 30,000 (86,000) Income before taxes $4,000 Income tax (50%) (2,000) Net income $2,000
A. 4 years.
B. 6 years.
C. 24 years.
D. 1 year.
E. 12 years.
Answer: A
You might also like to view...
Sharing your thoughts and needs indirectly or not at all is called
A) aggressive B) assertive C) non-assertive D) supportive
A document in academic professions that includes detailed and personal information about a candidate, used in many countries outside of the United States, is called what?
A) Blog B) LinkedIn profile C) Résumé D) Curriculum Vitae E) Social media page
Extensive problem solving probably would be required by a recent college graduate in the purchase of
A. a sports car. B. a new home. C. a color TV set. D. living room furniture. E. All these answers are correct.
Gander, an apparel company, is known to be a profit-hungry company. It lands in a controversy when it comes to light that the company pays almost nonliving wages to the workers in its manufacturing subsidiaries based in developing countries. In the context of business behavior, Gander's business conduct is:
A. legal and ethical. B. illegal and unethical. C. legal but unethical. D. illegal but ethical.