ue. The cash flows that would be produced by the machine are (Ignore income taxes):     Net Cash Flows Year 1 $ 128,000   Year 2 $ 105,000   Year 3 $ 126,000   Year 4 $ 123,000   Year 5 $ 122,000

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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Vandezande Inc. is considering the acquisition of a new machine that costs $370,000 and has a useful life of 5 years with no salvage value. The cash flows that would be produced by the machine are (Ignore income taxes):

 

 

Net Cash Flows

Year 1

$

128,000

 

Year 2

$

105,000

 

Year 3

$

126,000

 

Year 4

$

123,000

 

Year 5

$

122,000

 

 

Assume cash flows occur uniformly throughout a year except for the initial investment.

 

The payback period of this investment is closest to:

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