Vandezande Inc. is considering the acquisition of a new machine that costs $461,000 and has a useful life of 5 years with no salvage value. The incremental net operating income and incremental net cash flows that would be produced by the machine are (Ignore income taxes.): Incremental Net Operating Income Incremental Net Cash Flows Year 1 $ 69,000 $ 149,000 Year 2 $ 75,000 $ 150,000 Year 3 $ 86,000 $ 181,000 Year 4 $ 49,000 $ 151,000 Year 5 $ 91,000 $ 153,000 Assume cash flows occur uniformly throughout a year except for the initial investment. The payback period of this investment is closest to: (Round your answer to 1 decimal place.) Multiple Choice 2.0 years 5.0 years 4.1 years 2.9 years
Vandezande Inc. is considering the acquisition of a new machine that costs $461,000 and has a useful life of 5 years with no salvage value. The incremental net operating income and incremental net cash flows that would be produced by the machine are (Ignore income taxes.): Incremental Net Operating Income Incremental Net Cash Flows Year 1 $ 69,000 $ 149,000 Year 2 $ 75,000 $ 150,000 Year 3 $ 86,000 $ 181,000 Year 4 $ 49,000 $ 151,000 Year 5 $ 91,000 $ 153,000 Assume cash flows occur uniformly throughout a year except for the initial investment. The payback period of this investment is closest to: (Round your answer to 1 decimal place.) Multiple Choice 2.0 years 5.0 years 4.1 years 2.9 years
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Vandezande Inc. is considering the acquisition of a new machine that costs $461,000 and has a useful life of 5 years with no salvage value. The incremental net operating income and incremental net
Incremental Net Operating Income | Incremental Net Cash Flows | |||||
Year 1 | $ | 69,000 | $ | 149,000 | ||
Year 2 | $ | 75,000 | $ | 150,000 | ||
Year 3 | $ | 86,000 | $ | 181,000 | ||
Year 4 | $ | 49,000 | $ | 151,000 | ||
Year 5 | $ | 91,000 | $ | 153,000 | ||
Assume cash flows occur uniformly throughout a year except for the initial investment.
The payback period of this investment is closest to: (Round your answer to 1 decimal place.)
Multiple Choice
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