question 6

3 points Use the following information to answer Questions 6-13 Joe Vandelay buys a piece of equipment for $200,000. He puts down $40,000 and finances $160,000 from a local bank. Joe s opportunity cost is 5%, and the be charges 10% on the loan. The after-tax cash flows generated from the equipment are $54,000 per year for the next 5 years Should Joe buy the equipment based on payback period if his required payback period is less than 3 years? a. No as payback period is 3.70 years. O b. Yes as payback period is 4.15 years. Oc. Yes as payback period is 2.85 years. O d. No as payback period is 2.50 years