A company is considering the purchase of a new machine for $111,300. Management predicts that the machine can produce sales of $24,500 each year for the next 10 years. Expenses are expected to include direct materials, direct labor, and factory overhead totaling $20,400 per year, including depreciation of $6,400 per year. What is the payback period for the new machine?
Multiple Choice 13.70 years. 7.70 years. 10.60 years. 21.70 years. 9.20 years.
