Boone Corporation expects to buy a machine for $126,000, which will be depreciated over an 8-year period on a straight-line basis with no salvage value. The machine is expected to generate a net cash flow of $42,000 per year. What is the payback period?
A) 3.0 years
B) 3.5 years
C) 5.0 years
D) 6.4 years
Correct Answer:
Verified
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