A company is considering the purchase of a new machine for $51,300. Management predicts that the machine can produce sales of $16,500 each year for the next 10 years. Expenses are expected to include direct materials, direct labor, and factory overhead totaling $14,000 per year, including depreciation of $3,200 per year. What is the payback period for the new machine?

 A company is considering the purchase of a new machine for $51,300. Management predicts that the machine can produce sales of $16,500 each year for the next 10 years. Expenses are expected to include direct materials, direct labor, and factory overhead totaling $14,000 per year, including depreciation of $3,200 per year. What is the payback period for the new machine?

Multiple Choice

6.10 years.


7.60 years.


12.10 years.


20.10 years.


9.00 years. Correct