40. The management of London Corporation is considering the purchase of a new machine costing $750,000. The company's desired rate of return is 6%. The present value factors for $1 at compound interest of 6% for 1 through 5 years are 0.943, 0.890, 0.840, 0.792, and 0.747, respectively. In addition to this information, use the following data in determining the acceptability in this situation:

Year	Income from Operations		Net Cash Flow
1	$37,500		$187,500
2	37,500		187,500
3	37,500		187,500
4	37,500		187,500
5	37,500		187,500

The cash payback period for this investment is:

a.20 years.

b.5 years.

c.3 years.

d.4 years.

41. Zed Corporation is evaluating the purchase of a machine that costs $275,000. The annual cash revenues from the machine would be $50,000, and the annual cash expenses of the machine would be $10,000. What is the estimated cash payback period for the machine?

a.6.9 years

b.8.5 years

c.3.8 years

d.5.2 years

43. A project analysis using the net present value method indicates that the present value of cash inflows is $120,000, and the total amount of investment required at the start of the project is $100,000. Which of the following statements best describes the results of the project analysis?

a.The project should be rejected because the actual rate of return expected from the project is less than the minimum desired rate of return.

b.The project should be accepted because the actual rate of return expected from the project is more than the minimum desired rate of return.

c.The project should be rejected because the actual rate of return expected from the project is more than the minimum desired rate of return.

d.The project should be accepted because the actual rate of return expected from the project is less than the minimum desired rate of return.