Jimba's, Inc., has purchased a new donut maker. It cost $20,000 and has an estimated life of 10 years. The following annual donut sales and expenses are projected: Assume cash flows occur uniformly throughout a year except for the initial investment. The payback period on the new machine is closest to:
A)6.0 years
B)2.9 years
C)4.0 years
D)4.3 years

Question

Jimba's, Inc., has purchased a new donut maker. It cost $20,000 and has an estimated life of 10 years. The following annual donut sales and expenses are projected:  Assume cash flows occur uniformly throughout a year except for the initial investment. The payback period on the new machine is closest to:
A)6.0 years 
B)2.9 years 
C)4.0 years 
D)4.3 years

Quizplus · Accepted Answer

The Answer of Jimba's, Inc., has purchased a new donut maker. It cost $20,000 and has an estimated life of 10 years. The following annual donut sales and expenses are projected:  Assume cash flows occur uniformly throughout a year except for the initial investment. The payback period on the new machine is closest to:
A)6.0 years 
B)2.9 years 
C)4.0 years 
D)4.3 years