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Buy-Rite Pharmacy has purchased a small auto for delivering prescriptions. The auto was purchased for...

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Accounting

Buy-Rite Pharmacy has purchased a small auto for delivering prescriptions. The auto was purchased for $29,000 and will have a 6-year useful life and a $4,100 salvage value. Delivering prescriptions (which the pharmacy has never done before) should increase gross revenues by at least $32,100 per year. The cost of these prescriptions to the pharmacy will be about $25,200 per year. The pharmacy depreciates all assets using the straight-line method. The payback period for the auto is closest to (Ignore income taxes.):

A) 3.7 years

B) 3.6 years

C) 4.8 years

D) 4.2 years

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