Jimba'S Inc Payback period = Initial

Jimba's, Inc., has purchased a new donut maker. It cost $20,000 and has an estimated life of 10 years. The following annual donut sales and expenses are projected: Sales $30,000 Expenses: Flour, etc., required in making donuts $15,000 Salaries 8,000 Depreciation 2,000 25,000 Net operating income $5,000 Assume cash flows occur uniformly throughout a year except for the initial investment. The payback period on the new machine is closest to: a) 6.0 years b) 2.9 years c) 4.0 years d) 4.3 years