Purvell Corporation has just acquired a new machine with the following characteristics (Ignore income taxes.): The company uses straight-line depreciation and a $5,000 salvage value. Assume cash flows occur uniformly throughout a year except for the initial investment and the salvage at the end of the project.The payback period is closest to:
A) 3.33 years
B) 3.0 years
C) 8.0 years
D) 2.9 years

Question

Purvell Corporation has just acquired a new machine with the following characteristics (Ignore income taxes.):  The company uses straight-line depreciation and a $5,000 salvage value. Assume cash flows occur uniformly throughout a year except for the initial investment and the salvage at the end of the project.The payback period is closest to:
A) 3.33 years 
B) 3.0 years 
C) 8.0 years 
D) 2.9 years

Quizplus · Accepted Answer

The Answer of Purvell Corporation has just acquired a new machine with the following characteristics (Ignore income taxes.):  The company uses straight-line depreciation and a $5,000 salvage value. Assume cash flows occur uniformly throughout a year except for the initial investment and the salvage at the end of the project.The payback period is closest to:
A) 3.33 years 
B) 3.0 years 
C) 8.0 years 
D) 2.9 years

Purvell Corporation Has Just Acquired a New Machine with the Following