100,000 26 Disadvantages of these methods Quick Check . Payback is "short-sighted" . The Jackson Company has invested in a machine that cost $70,000, that has a useful life of seven years, and - Ignores cashflow occurring after pay back that has no salvage value at the end of its useful life. However, commonly used as a "double check" The machine is being depreciated by the straight-line . Simple rate of return is accounting based method, based on its useful life. It will have a Not a cash flow method payback period of four years. Given these data, the simple rate of return on the machine is closest to: . incorporates non-cash costs such as depreciation a) 7.1% -Not as useful for uneven projects because the b) 8.2% simple rate of return will fluctuate c) 10.7% Both methods ignore time value of money d) 39.3% 28 Quick Check The Jackson Company has invested in a machine that cost $70,000, Depreciation in NPV hat has a useful life of seven years, and that has no salvage value at eciated by the