Glare Company Is Considering the Purchase of a New Machine

Multiple Choice

Glare Company is considering the purchase of a new machine for $150,000. The machine generates annual revenues of $62,500 and annual expenses of $42,000, which include $8,100 of depreciation. What is the payback period in years on the machine approximated to one decimal point?

A) 2.1 years
B) 1.4 years
C) 5.2 years
D) 4.3 years