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A Company with $800,000 in Operating Assets Is Considering the Purchase

Question 35

Multiple Choice

A company with $800,000 in operating assets is considering the purchase of a machine that costs $75,000 and which is expected to reduce operating costs by $20,000 each year.The payback period for this machine in years is closest to:


A) 0.27 years.
B) 3.75 years.
C) 10.7 years.
D) 40 years.

Correct Answer:

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