1. Assume that management is evaluating the purchase of a new machine as follows: Cost of new machine: $800,000 Residual value: $0 Estimated total income from machine: $300,000 Expected useful life: 5 years The average rate of return on this asset would be a. 15% b. 14% c. 13% d. 16% 2. Cash payback period is computed as a. Initial Cost multiplied by Annual Net Cash Inflow b. Initial cost plus Residual Value divided by Net Cash Inflow c. Estimated Average Annual Income divided by Total Cash Inflow d. Initial Cost divided by Annual Net Cash Inflow