Brent Corporation is considering purchasing a machine for $2,000,000. It is expected that the machine will generate afte
Posted: Sat May 07, 2022 8:36 pm
Brent Corporation is considering purchasing a machine for
$2,000,000. It is expected that the machine will generate after-tax
income of $80,000 per year. The company will use straight-line
depreciation for the new machine over the machine's useful life of
10 years; salvage value is estimated as $0. Brent expects to be in
the 30% tax bracket.
What is the estimated payback period for the new machine?
A) 7.14
years
B) 8.33
years
C) 9.16
years
D) 10.00
years
E)
14.29 years
$2,000,000. It is expected that the machine will generate after-tax
income of $80,000 per year. The company will use straight-line
depreciation for the new machine over the machine's useful life of
10 years; salvage value is estimated as $0. Brent expects to be in
the 30% tax bracket.
What is the estimated payback period for the new machine?
A) 7.14
years
B) 8.33
years
C) 9.16
years
D) 10.00
years
E)
14.29 years