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

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
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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 $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
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