question archive (Ignore income taxes in this problem
(Ignore income taxes in this problem
Subject:AccountingPrice: Bought3
(Ignore income taxes in this problem.) Buy-Rite Pharmacy has purchased a small auto for delivering prescriptions. The auto was purchased for $9,000 and will have a 6-year useful life and a $3,000 salvage value. Delivering prescriptions (which the pharmacy has never done before) should increase gross revenues by at least $5,000 per year. The cost of these prescriptions to the pharmacy will be about $2,000 per year. The pharmacy depreciates all assets using the straight-line method. The payback period for the auto is:
A. 1.9 Years
B. 2.4 Years
C. 1.7 Years
D. 2.6 Years
