1. (Ignore income taxes in this problem.) FLIP Inc, is considering the acquisition of equipment that costs $480,000 and has a useful life of 6 years with no salvage value. The incremental net cash flows that would be generated by the equipment are:

Incremental net cash flows

Year 1	139,000
Year 2	186,000
Year 3	140,000
Year 4	157,000
Year 5	147,000
Year 6	126,000

The payback period of this investment is closest to:

A) 3.1 years

B) 2.9 years

C) 5.0 years

D) 3.5 years

2. Which of the following should be classified as a financing activity on a statement of cash flows?

	Interest Paid	Dividends Paid
A)	Yes	Yes
B)	No	Yes
C)	Yes	No
D)	No	No

A) Option A

B) Option B

C) Option C

D) Option D