Buy-Rite Pharmacy has purchased a small auto for delivering prescriptions. The auto was purchased for $21,000 and will have a 6-year useful life and a $5,000 salvege value. Delivering prescriptions (which the pharmacy has never done before) should increase gross revenues by at least $33,000 per year. The cost of these prescriptions to the pharmacy will be about $27,000 per year. The pharmacy depreciates all assets using the straight-line method. The payback period for the auto is closest to (ignore income taxes) (Round your answer to 1 decimal place) Multiple Choice O O 3.5 years 43 years 4.5 years 27 years

FINANCIAL ACCOUNTING
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Author:Libby
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Chapter1: Financial Statements And Business Decisions
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Buy-Rite Pharmacy has purchased a small auto for delivering prescriptions. The auto was purchased for $21,000 and will have a 6-year useful life and a $5,000 salvage value. Delivering
prescriptions (which the pharmacy has never done before) should increase gross revenues by at least $33,000 per year. The cost of these prescriptions to the pharmacy will be about
$27.000 per year. The pharmacy depreciates all assets using the straight-line method. The payback period for the auto is closest to (ignore income taxes): (Round your answer to 1
decimal place)
Multiple Choice
O 35 years
O 43 years
O 45 years
O 27 years
G
Transcribed Image Text:Buy-Rite Pharmacy has purchased a small auto for delivering prescriptions. The auto was purchased for $21,000 and will have a 6-year useful life and a $5,000 salvage value. Delivering prescriptions (which the pharmacy has never done before) should increase gross revenues by at least $33,000 per year. The cost of these prescriptions to the pharmacy will be about $27.000 per year. The pharmacy depreciates all assets using the straight-line method. The payback period for the auto is closest to (ignore income taxes): (Round your answer to 1 decimal place) Multiple Choice O 35 years O 43 years O 45 years O 27 years G
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