(Ignore income taxes in this problem.) A company with $500,000 in operating assets is considering the purchase of a machine that costs $60,000 and which is expected to reduce operating costs by $15,000 each year.These reductions in cost occur evenly throughout the year.The payback period for this machine in years is closest to:

A) 0.25 years
B) 8.3 years
C) 4 years
D) 33.3 years

Operating Assets

Cash, accounts receivable, inventory, plant and equipment, and all other assets held for operating purposes.

Payback Period

The length of time required for an investment to recover its initial outlay in terms of profits or savings.

Operating Costs

Expenses associated with the daily operations of a business, including rent, utilities, and payroll, but excluding costs directly related to production.