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A company is considering purchasing a new machine for $40,000. It is estimated that the...

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Accounting

A company is considering purchasing a new machine for $40,000. It is estimated that the machine will have a useful life of 10 years and a zero salvage value. The machine will generate an after-tax net income of $4,000 per year. Annual depreciation expense will be $4,000. What is the payback period for the new machine?

Select one:

a.

10 years.

b.

4 years.

c.

20 years.

d.

5 years.

e.

40 years.

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