Jimba's, Inc

Multiple Choice

Jimba's, Inc., has purchased a new donut maker. It cost $20,000 and has an estimated life of 10 years. The following annual donut sales and expenses are projected: Assume cash flows occur uniformly throughout a year except for the initial investment. The payback period on the new machine is closest to:

A) 6.0 years
B) 2.9 years
C) 4.0 years
D) 4.3 years