3) THE PAYBACK PERIOD IF THE SANDBOX TOY PROJECT HAD A RESIDUAL VALUE OF $175,000 IS ?? YEARS. (ROUND ANSWER TO TWO DECIMAL PLACES.)

Toy World Products is considering producing toy action figures and sandbox toys. The products require different specialized machines, each oosting $1.1 million. Each machine has a five-year life and zero residual value. The two products have different pattems of predicted net cash inflows (Click the icon to view the data.) Caloulate the sandbox toy projects payback period. If the sandbox toy project had a residual value of $175,000, would the payback period change? Explain and recalculate if necessary. Does this investment pass Toy World's payback period screening rule? Calculate the sandbox toy project's payback period. First, enter the formula, then calculate the payback period. (Enter amounts in dollars, not millions. Round your answer to two decimal places. Abbreviation used: Amt. Amount.) )- Payback Annual Net Cash Inflows Year Sandbox toy project Toy action figure project 530,000 350,000 320,000 270,000 50,000 2,143,750 $ 1,520,000 428,750$ 428,750 428,750 428,750 428,750 2 4 Total Toy World will consider making capital investments only if the payback period of the project is less than 3.5 years and the ARR exceeds 8%