A company is considering purchasing a machine for $21,000.The machine will generate an after-tax net income of $2,000 per year.Annual depreciation expense would be $1,500.What is the payback period for the new machine?

A) 4 years.
B) 6 years.
C) 10.5 years.
D) 14 years.
E) 42 years.

The payback period is calculated by dividing the initial investment by the annual cash inflow. Here, the annual cash inflow is the sum of the after-tax net income ($2,000) and the annual depreciation expense ($1,500), which totals $3,500. Therefore, the payback period is $21,000 / $3,500 = 6 years.