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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 $105,000. The equipment will have an initial cost of $473,000 and have a 10 year life. If the salvage value of the equipment is estimated to be $84,000, what is the payback period?

10.00 years

5.25 years

4.50 years

3.29 years

Answer & Explanation Solved by verified expert
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