(Ignore income taxes in this problem.) Baldock Inc. is considering the acquisition of a new machine that costs $420,000 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:

-The payback period of this investment is closest to:

Question

(Ignore income taxes in this problem.) Baldock Inc. is considering the acquisition of a new machine that costs $420,000 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:

-The payback period of this investment is closest to:

Quizplus · Accepted Answer

The payback period is calculated by dividing the initial investment by the annual cash inflow. The closest option to the calculated payback period is 2.8 years.

(Ignore Income Taxes in This Problem