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What is the payback period for sos inc

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Reference no: EM133006914

SOS, Inc. is considering the purchase of a P40,000 machine which will be depreciated on a straight line basis over an eight-year period with no salvage value. The machine is expected to generate net cash income before income taxes of P12,000 a year. Assume that the income tax rate is 50%.

Problem 1: What is the payback period?

A. 2.6 years
B. 3.3 years
C. 2.4 years
D. 4.7 years

Reference no: EM133006914

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