Pro-Mate,Inc

Multiple Choice

Pro-Mate,Inc.is a producer of athletic equipment.The company is considering the purchase of a machine to produce baseball bats.The machine will cost $60,000 and have a 10-year useful life.The following annual revenues and expenses are projected: The machine will have no salvage value.Assume cash flows occur uniformly throughout a year except for the initial investment. The payback period for the new machine is about:

A) 6.0 years
B) 1.5 years
C) 5.4 years
D) 3.75 years