Vandezande Incorporated Is Considering the Acquisition of a New Machine

Vandezande Incorporated 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 incremental net operating income and incremental net cash flows that would be produced by the machine are (Ignore income taxes.) : Assume cash flows occur uniformly throughout a year except for the initial investment.The payback period of this investment is closest to:

A) 2.9 years
B) 4.9 years
C) 3.1 years
D) 5.0 years

Correct Answer:

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