Heartland Paper Company is considering the purchase of a new high-speed cutting machine. Two cutting machine manufacturers have approached Heartland with proposals: (1) Toledo Tools and (2) Akron Industries. Regardless of which vendor Heartland chooses, the following incremental cash flows are expected to be realized:

Year	Incremental Cash Inflows				Incremental Cash Outflows
1	$	26,000			$	20,000
2		27,000				21,000
3		32,000				26,000
4		35,000				29,000
5		34,000				28,000
6		33,000				27,000

a.	If the machine manufactured by Toledo Tools costs $27,000, what is its expected payback period? (Round your answer to 1 decimal place.)

Payback period

years

sheet is drawn here

b.	If the machine manufactured by Akron Industries has a payback period of 66 months, what is its cost?

Machine cost

sheet is drawn here

c.

Which of the machines is most attractive based on its respective payback period?

	Akron Industries
	Toledo Tools