A New Manufacturing Machine Is Expected to Cost $286,000, Have

Multiple Choice

A new manufacturing machine is expected to cost $286,000, have an eight-year life, and a $30,000 salvage value. The machine will yield an annual incremental after-tax income of $35,000 after deducting the straight-line depreciation. Compute the payback period for the purchase.

A) 8.7 years.
B) 3.8 years.
C) 4.3 years.
D) 7.3 years.
E) 5.4 years.