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Business, 02.04.2021 22:00 IsabellaGracie

Pique Corporation wants to purchase a new machine for $300,000.Management predicts that the machine can produce sales of $200,000 each year for the next 5 years. Expenses are expected to include direct materials, direct labor, and factory overhead (excluding depreciation)totaling $80,000 per year. The firm uses straight-line depreciation with no residual value for all depreciable assets. Pique's tax rate is 40%.Management requires a minimum 10% rate of return on all investments. What is the payback period for the new machine (rounded to nearest one-tenth of a year)? (Assume that the cash inflows occur evenly throughout the year. ) A) 2.5 years.
B) 2.7 years.
C) 3.1 years.
D) 3.6 years.
E) 4.2 years.

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Pique Corporation wants to purchase a new machine for $300,000.Management predicts that the machine...
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