A company is considering purchasing factory equipment that costs $384000 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

2.0 years.8.0 years.8.0 years.4.0 years.

Answer rating: 100% (QA)

Solution 40 years Workings Formula for calculating payback period when cash f... View the full answer