Bark Company is considering buying a machine for $240,000 with an estimated life

Question

Bark Company is considering buying a machine for $240,000 with an estimated life of ten years and no salvage value. The straight-line method of depreciation will be used. The machine is expected to generate net income of $6,000 each year. The cash payback period on this investment is 20 years
10 years
8 years
4 years Bark Company is considering buying a machine for $240,000 with an estimated life of ten years and no salvage value. The straight-line method of depreciation will be used. The machine is expected to generate net income of $6,000 each year. The cash payback period on this investment is 20 years
10 years
8 years
4 years 20 years
10 years
8 years
4 years

Explanation / Answer

Well Thank you Holders for such a detailed answer. For people who are looking to learn how it is done

equipment cost 240000

10 yr depreciation straight line method

240000/10=24000

Cash flow 6000+24000=30000

240000/30000=8

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