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Compute the payback period for the auto

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Question - Buy-Rite Pharmacy has purchased a small auto for delivering prescriptions. The auto was purchased for $25,000 and will have a 6-year useful life and a $5,400 salvage value. Delivering prescriptions (which the pharmacy has never done before) should increase gross revenues by at least $33,400 per year. The cost of these prescriptions to the pharmacy will be about $27,800 per year. The pharmacy depreciates all assets using the straight-line method. Compute the payback period for the auto?

Reference no: EM132054614

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