Davis Company Is Considering the Purchase of a New Piece

Davis Company is considering the purchase of a new piece of equipment that will cost $1,600,000 and have a life of five years with no expected salvage value.The expected cash flows associated with the project are as follows:

- What is the average annual income for this project?

A) $900,000
B) $1,500,000
C) $600,000
D) $700,000
E) $300,000