A company is considering buying a new machine. The new machine is valued at $900,000 which has an estimated useful life of 6 years and has no salvage value. The company estimates annual cash inflows will increase by $400,000, but annual operating expenses will increase by $190,000. What is the payback period for this investment?

CAPITAL BUDGETING

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Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]

A company is considering buying a new machine. The new machine is valued at $900,000 which has an estimated useful life of 6 years and has no salvage value. The company estimates annual cash inflows will increase by

A	4.0 years
B	4.3 years
C	4.5 years
D	4.7 years

Explanation:

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ECONOMICS

COST ACCOUNTING

CAPITAL BUDGETING