Slater Co manufactures slate floor tiles and is considering a proposal to purchase a new piece of
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Question:
Slater Co manufactures slate floor tiles and is considering a proposal to purchase a new piece of machinery that will clean and polish the tiles before they are packaged. This task currently requires an average of 12 minutes of labor at a cost of $5.60 per box of tiles. The machine will cost $152,000 and the operating costs of the machine are anticipated to be $18,000 per year, in the form of $1.80 variable operating costs per box of tiles. Slater Co expects to manufacture and sell 10,000 boxes of slate tiles per year. What is the payback period for this proposed capital investment?
a. 2 years
b. 3 years
c. 4 years
d. 5 years
Related Book For
Fundamental financial accounting concepts
ISBN: 978-0078025365
8th edition
Authors: Thomas P. Edmonds, Frances M. Mcnair, Philip R. Olds, Edward
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