1.If an asset costs $270000 and is expected to have a $30000 salvage value at the end of its 10-year life, and generates annual net cash inflows of $30000 each year, the cash payback period is

7 years.

8 years.

10 years.

9 years.

2.Swifty Company is considering buying a machine for $560000 with an estimated life of 10 years and no salvage value. The straight-line method of depreciation will be used. The machine is expected to generate net income of $8000 each year. The cash payback period on this investment is

7.00 years.

35.00 years.

10.00 years.

8.75 years.

3.Splish Brothers Corp. is considering the purchase of a piece of equipment that costs $30000. Projected net annual cash flows over the project's life are:

YearNet Annual Cash Flow1$ 9000213000310000411000

The cash payback period is

2.71 years.

2.43 years.

1.86 years.

2.80 years.