Nancy Shrills is considering an expansion of one of its existing buildings to add more manufacturing space for its kid$-$friendly

noisemakers. Several possible scenarios exist for future cash flows, as follows.

Construction costs of $$505,000$; steady sales and costs each year, netting to an annual operating cash inflow of $$70,000$; the

expansion would have no salvage value at the end of its $10-$year useful life $($the building would be repurposed for a different

product$).$

Construction costs of $$505,000$; rising and then falling net cash flows each year for $10$ years, as follows: $$51,000$ for the first

$2$ and last $2$ years, $$177,000$ for years $3-5,$ and $$99,000$ for years $6-8.$

Construction costs of $$714,000$; no cash flows in year $1,$$$74,000$ in years $2$ and $3,$$$148,000$ in year $4,$$$104,500$ in years $5-8,$

and $$50,000$ in the last $2$ years.

$($a$)$

Calculate the simple payback period for all three scenarios. $($Round answers to $2$ decimal places e$.$g$.15\mathrm{.}25.)$

Scenario $1$

Simple payback

period

Scenario $2$

years

Scenario $3$

years

years

years

years

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