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(Ignore income taxes in this problem.) Buy-Rite Pharmacy has purchased a small auto for delivering prescriptions....

(Ignore income taxes in this problem.) Buy-Rite Pharmacy has purchased a small auto for delivering prescriptions. The auto was purchased for $29,000 and will have a 6-year useful life and a $4,800 salvage value. Delivering prescriptions (which the pharmacy has never done before) should increase gross revenues by at least $32,800 per year. The cost of these prescriptions to the pharmacy will be about $26,600 per year. The pharmacy depreciates all assets using the straight-line method. The payback period for the auto is closest to:

4.7 years

5.5 years

3.9 years

4.3 years

0 0
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