(Ignore income taxes in this problem.) Buy-Rite Pharmacy has purchased a small auto for delivering prescriptions.The auto was purchased for $24,000 and will have a 6-year useful life and a $6,000 salvage value.Delivering prescriptions (which the pharmacy has never done before) should increase gross revenues by at least $28,000 per year.The cost of these prescriptions to the pharmacy will be about $22,000 per year.The pharmacy depreciates all assets using the straight-line method.The payback period for the auto is closest to:
A) 2 years
B) 1.8 years
C) 4 years
D) 1.2 years
Correct Answer:
Verified
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