Lawson Co Is Considering Purchasing a New Machine Which Will Cost

Multiple Choice

Lawson Co. is considering purchasing a new machine which will cost $350000 but which will decrease costs each year by $100000. The useful life of the machine is 10 years. The machine would be depreciated straight-line with no residual value over its useful life at the rate of $35000/year. The cash payback period is

A) 7.0 years.
B) 3.5 years.
C) 3.2 years.
D) 10.0 years.