Answer:
option (c) 8 years
Explanation:
Data provided in the question:
Cost of the machine = $240,000
Useful life = 10 years
Salvage value = 0
Net income = $6,000 each year
Now,
Using the straight-line method of depreciation
Annual depreciation = [ Cost - Salvage value ] ÷ Useful life
= [ $240,000 - 0 ] ÷ 10
= $24,000
Thus,
Cash flow = $6,000 + $24,000
= $30,000
Therefore,
The payback period = ( Cost ) ÷ ( Cash flow )
= $240,000 ÷ $30,000
= 8 years
Hence,
the correct answer is option (c) 8 years
Answer:
$6,021
Explanation:
The computation of the company's total liabilities is shown below:-
Current Assets = Total Assets - Fixed Assets
= $8,510 - $6,025
= $2,485
Current Liabilities = Current Assets - Net Working Capital
= $2,485 - $1,005
= $1,480
Total Liabilities = Long-Term Debt + Current Liabilities
= $4,541 + $1,480
= $6,021