D 4 pts Question 8 A company with $800,000 in operating assets is considering purchasing a machine that costs $300,000 with an estimated salvage value of $40,000. The acquisition is expected to reduce operating costs by $55,000 in year 1 $60,000 in year 2 $65,000 in year 3 $70,000 in year 4 $75,000 in year 5 $80,000 in year 6 How long is the payback period? 6 years 3 months O 5 years 4 months 5 years 3 months 6 years 4 months 4 pts Question 7 Why is the payback period often criticized because It ignores the cash flows after the end of the payback period. It is based on accounting income, which most likely differs from the actual cash flows. It requires the estimate of a hurdle rate that is subject to uncertain economic effects. It requires trial and error to determine the quantitative amount on which to make a decision Question 6 4 pts Which statement is true when calculating the internal rate of return; The required rate of return is needed The initial investment is not needed The internal rate of return is needed The required rate of return is not needed