The payback period on the new machine is closest to:

A) 3.6 years.
B) 5.0 years.
C) 1.4 years.
D) 2.7 years.

Payback Period

The time it takes for an investment to generate an amount of income or cash equal to the cost of the investment.

Depreciation

Depreciation is the method of allocating the cost of a tangible or physical asset over its useful life.

Salvage Value

An asset's forecasted residual value once it has fulfilled its period of usefulness.