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

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Accounting

Palmer Corp. is considering the purchase of a new piece of equipment. The cost savings from the equipment would result in an annual increase in net income after tax of $191,000. The equipment will have an initial cost of $402,000 and have a 8 year life. If the salvage value of the equipment is estimated to be $83,000, what is the payback period?

1.74 years

2.10 years

2.85 years

8.00 years

Answer & Explanation Solved by verified expert
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