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What is the payback period of the machine

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Reference no: EM132882626

Question - Omega Company is planning to invest in a machine that costs P825,000 with a 15-year economic life. The economic life of the machine is same with its useful life. The new machine is expected to produce annual net cashflow before interest and tax of P73,750 over its useful life. Omega Company is using a straight-line method of depreciation. The tax rate is 20%. What is the payback period of the machine?

a. 11.79 years

b. 5.70 years

c. 12.66 years

d. 6.60 years

Reference no: EM132882626

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