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A company is planning to purchase a machine that will cost $42,000 with a six-...

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Accounting

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A company is planning to purchase a machine that will cost $42,000 with a six- year life and no salvage value. The company expects to sell the machine's output of 3,000 units evenly throughout each year. A projected income statement for each year of the asset's life appears below. What is the payback period for this machine? $105,000 Sales Costs: Manufacturing Depreciation on machine Selling and administrative expenses Income before taxes Income tax (30%) Net income $57,000 7,000 35,000 (99,000) $ 6,000 (1,800) $ 4,200 Multiple Choice 20.00 years 10.00 years 3.75 years 125 year

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