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MC.10-092 MC.11-066 MC.11-074 MC.11-079 MC.11-095 MC.11-111 MC.11-112.ALGO MC.11-126 EX.07-02.ALGO BE.08-01.ALGO EX.09-02.ALGO BE.11.03.ALGO Hide or show questions Progress:30/39 items Question Content Area An anticipated purchase of

MC.10-092

MC.11-066

MC.11-074

MC.11-079

MC.11-095

MC.11-111

MC.11-112.ALGO

MC.11-126

EX.07-02.ALGO

BE.08-01.ALGO

EX.09-02.ALGO

BE.11.03.ALGO

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Question Content Area

An anticipated purchase of equipment for $490,000 with a useful life of 8 years and no residual value is expected to yield the following annual net incomes and net cash flows:

Year Net Income Net Cash Flow
1 $60,000 $110,000
2 50,000 100,000
3 50,000 100,000
4 40,000 90,000
5 40,000 90,000
6 40,000 90,000
7 40,000 90,000
8 40,000 90,000

What is the cash payback period?

a.5 years

b.4 years

c.6 years

d.3 years

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