19. Monty Company is considering buying a machine for $340000 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 $6000 each year. The cash payback period on this investment is

28.33 years.

5.67 years.

8.50 years.

10.00 years.

20.

Use the following table,

	Present Value of an Annuity of 1
Period	8%	9%	10%
1	0.926	0.917	0.909
2	1.783	1.759	1.736
3	2.577	2.531	2.487

A company has a minimum required rate of return of 9%. It is considering investing in a project which costs $350000 and is expected to generate cash inflows of $150000 at the end of each year for three years. The net present value of this project is

$75000.

$29650.

$37965.

$379650.

21. The following information is available for a potential investment for Panda Company:

Initial investment	$110000
Net annual cash inflow	20000
Net present value	43650
Salvage value	10000
Useful life	10 yrs.

The potential investments profitability index is

3.55.

1.40.

5.50.

2.52.

22. A project with an initial investment of $64000 and a profitability index of 1.239 also has an internal rate of return of 12%. The present value of net cash flows is

$79296.

$51655.

$71680.

$64000.