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 FlowsYear 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:

Payback period is the period within which the initial investment is recovered . It is the time taken…

Answered: ue. The cash flows that would be…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 18EB: Garnette Corp is considering the purchase of a new machine that will cost $342,000 and provide the...

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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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