. Hayden Company is considering the acquisition of a machine that costs $675,000. The machine is expected to have a useful life of 6 years, a negligible residual value, an annual net cash flow of $150,000, and annual operating income of $87,500. What is the estimated cash payback period for the machine?

a. 3.5 years

b. 4 years

c. 4.5 years

d. 5 years

18. Which of the following is not an advantage of the average rate of return method?

a. easy to use

b. takes into consideration the time value of money

c. includes the amount of income earned over the entire life of the proposal

d. . emphasizes accounting income