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Demonstrate the payback period is

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Question 1: VRT Ltd is considering investing in a new machine which costs $480,000. For accounting purposes this machine can be fully depreciated over 6 years; but for tax purposes, the machine can be fully depreciated over 5 years. The machine has no resale value. The annual cost savings resulting from the purpose of this machine is $120,000. Assume a tax rate of 20 per cent. The payback period is

Reference no: EM132516547

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