A company is considering the purchase of a new machine for $48,000.Management predicts that the machine can produce sales of $16,000 each year for the next 10 years.Expenses are expected to include direct materials,direct labor,and factory overhead totaling $12,000 per year including depreciation of $3,000 per year.Income tax expense is $1,600 per year based on a tax rate of 40%.What is the payback period for the new machine?
A)20.0 years.
B)6.0 years.
C)7.5 years.
D)12.0 years.
E)8.9 years.

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The Answer of A company is considering the purchase of a new machine for $48,000.Management predicts that the machine can produce sales of $16,000 each year for the next 10 years.Expenses are expected to include direct materials,direct labor,and factory overhead totaling $12,000 per year including depreciation of $3,000 per year.Income tax expense is $1,600 per year based on a tax rate of 40%.What is the payback period for the new machine?
A)20.0 years.
B)6.0 years.
C)7.5 years.
D)12.0 years.
E)8.9 years.

A Company Is Considering the Purchase of a New Machine