9. Johnson Co. is considering purchasing a new machine which will cost $350,000, but which will decrease costs each year by $100,000. The useful life of the machine is 10 years. The machine would be depreciated straight-line with no residual value over its useful life at the rate of $35,000/year. The cash payback period is: (Answer: 3.5 years)

10. If an asset cost $270,000 and is expected to have a $60,000 salvage value at the end of its twelve-year life, and generates annual net cash inflows of $40,000 each year, the cash payback period is: (Answer: 6.75 years)