Hayden Company is considering the acquisition of a machine that costs $320,000. The machine is expected to have a useful life of 6 years, a negligible residual value, an annual net cash flow of $86,000, and annual operating income of $73,100. What is the estimated cash payback period for the machine (round to one decimal points)? Oa. 1.2 years Ob. 5.6 years Oc. 3.7 years Od. 4.4 years

Hayden Company is considering the acquisition of a machine that costs $320,000. The machine is expected to have a useful life of 6 years, a negligible residual value, an annual net cash flow of $86,000, and annual operating income of $73,100. What is the estimated cash payback period for the machine (round to one decimal points)? Oa. 1.2 years Ob. 5.6 years Oc. 3.7 years Od. 4.4 years

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.

Question

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Hayden Company is considering the acquisition of a machine that costs $320,000. The machine is expected to have a useful life
of 6 years, a negligible residual value, an annual net cash flow of $86,000, and annual operating income of $73,100. What is the
estimated cash payback period for the machine (round to one decimal points)?
Oa. 1.2 years
Ob. 5.6 years
Oc. 3.7 years
Od. 4.4 years

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