A company is considering purchasing factory equipment that costs $$528000$ and is estimated to have no salvage value at the end of its $8-$year useful life. If the equipment is purchased, annual revenues are expected to be $$135000$ and annual operating expenses exclusive of depreciation expense are expected to be $$39000.$ The straight$-$line method of depreciation would be used.

The cash payback period on the equipment is

$17\mathrm{.}6$ years.

$5\mathrm{.}5$ years.

$2\mathrm{.}8$ years.

$8\mathrm{.}0$ years.

Answer rating: 100% (QA)

Answer The cash payback period is the time it takes for the initial investment in the equipment to b... View the full answer