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
Related questions
Question
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
-
2.0 years
-
5.0 years
-
4.1 years
-
2.9 years
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 2 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education