Clarinet Publishing is considering the purchase of a used printing press costing $25,600. The printing press would generate a net cash inflow of $10,000 a year for 10 years. At the end of 10 years, the press would have no salvage value. The company's cost of capital is 10 percent. The company uses straight-line depreciation.
The investment's payback period in years (rounded to two decimal points) is:
A) 2.56
B) 2.13
C) 1.92
D) 3.00
Correct Answer:
Verified
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