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Nelson Corp. is considering the purchase of a new piece of equipment. The cost savings...

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Accounting

Nelson Corp. is considering the purchase of a new piece of equipment. The cost savings from the equipment would result in an annual increase in cash flow of $103,000. The equipment will have an initial cost of $515,000 and have a 6 year life. If the salvage value of the equipment is estimated to be $78,000, what is the payback period? Ignore income taxes.

4.24 years

5.00 years

5.76 years

8.00 years

Answer & Explanation Solved by verified expert
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