1.The Smart Company manufactures a plastic mailbox. The machine that is being used often breaks down requiring someone from outside the company to repair the machine. There is considerable down time when the machine is not working.

The company is considering the purchase of a new machine that is expected to be more reliable and break down far less than the old machine. The following cash flows for the new machinethat will have a useful life of 10 years is as follows:

Investment (Today)$1,200,000

Year 1 to Year 4cash inflow $150,000

Year 5 to Year 8cash inflow $225,000

Year 9 to Year 10 cash inflow $250,000

Required

Calculate the payback period for the new machine and explain what the payback period means to the business.Explain what could go wrong with this payback situation.

2.The Smart Company has budgeted its credit sales for the first 6 months (January to June) of 2023 year as follows:

January$100,000 February$200,000 March$300,000 April$400,000 May$500,000 June$500,000

Collections of credit sales are normally as follows:

Collected within the same month of sale: 50% Collected in 30-60 days: 30% Collected in 60-90 days: 20%

The cash balance on January 1 is expected to be $50,000.

Cash payments are expected to total $200,000 each month.

Required:

Calculate the net cash balance at the end of the Junemonth for the January to June time frame. Suggest a strategy for the company, as they want to expedite the receipt of their money owed from credit sales, as the terms they provide are 30 days from the date of sale. Explain why a business simply will not just demand all customers pay at time of purchase so there will be no need to collect on credit sales.

Please solve the question properly with full explanation and calculation using proper format.Thanks