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Heidi Company is considering the acquisition of a machine that costs $583,050. The machine is expected to have a useful life of six years, a negligible residual value, an annual net cash flow of $89,700, and annual operating income of $69,000. What is the estimated cash payback period for the machine (round to one decimal point)?

Heidi Company is considering the acquisition of a machine that costs $583,050. The machine is expected to have a useful life of six years, a negligible residual value, an annual net cash flow of $89,700, and annual operating income of $69,000. What is the estimated cash payback period for the machine (round to one decimal point)?

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Heidi Company is considering the acquisition of a machine that costs $583,050. The machine is expected to have a useful life of six years, a negligible residual value, an annual net cash flow of $89,700, and annual operating income of $69,000. What is the estimated cash payback period for the machine (round to one decimal point)? Oa. 84 years Оb. 1.3 years Oc. 3.7 years Od. 6.5 years
Transcribed Image Text:Heidi Company is considering the acquisition of a machine that costs $583,050. The machine is expected to have a useful life of six years, a negligible residual value, an annual net cash flow of $89,700, and annual operating income of $69,000. What is the estimated cash payback period for the machine (round to one decimal point)? Oa. 84 years Оb. 1.3 years Oc. 3.7 years Od. 6.5 years
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