Salam Corporation purchased a vibratory finishing machine for $25,000 in year 0. The useful life of...

Salam Corporation purchased a vibratory finishing machine for $25,000 in year 0. The useful life of the machine is 10 years, at the end of which the machine is estimated to have a salvage value of 5,000 after 10 years. The machine generates net annual benefits of $5,000.The Conventional and Discounted Payback Period If SALAM’s MARR (rate of return) is 12%, will be following?

Conventional Pay Back of 6 years & Discounted Pay Back of 9 years

Conventional Pay Back of 4.5 years & Discounted Pay Back of 9 years

Conventional Pay Back of 5.5 years & Discounted Pay Back of 6.5 years

None of these

Expert Solution

Conventional Payback Period = 5 years

Discounted Payback Period = 8.1 Years

Hence, answer is None of these

Workings

jeff jeffy answered 2 years ago

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