21

A company is considering purchasing a machine that costs $400,000 and is estimated to have no salvage value at the end of its 8-year useful life. If the machine is purchased, annual revenues are expected to be $100,000 and annual operating expenses exclusive of depreciation expenses are expected to be $38,000. The straight-line method of depreciation would be used. The cash payback period on the machine is: Select one: KIN a. 4.5 years KIM b. 6.45 years C. 30 years d 6 IMIN e. B.2 years Wat FBB years