FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Vandezande Incorporated is considering the acquisition of a new machine that costs $438,000 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
$ 154,000
$164,000
Year 3
$ 96,000
$ 175,000
Year 4 $ 59,000
$ 161,000
Year 5 $ 101,000
$ 163,000
Assume cash flows occur uniformly throughout a year except for the initial investment.
The payback period of this investment is closest to
Year 1 $ 79,000
Year 2 $ 85,000
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Transcribed Image Text:Vandezande Incorporated is considering the acquisition of a new machine that costs $438,000 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 $ 154,000 $164,000 Year 3 $ 96,000 $ 175,000 Year 4 $ 59,000 $ 161,000 Year 5 $ 101,000 $ 163,000 Assume cash flows occur uniformly throughout a year except for the initial investment. The payback period of this investment is closest to Year 1 $ 79,000 Year 2 $ 85,000
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