Playland Products is considering producing toy action figures and sandbox toys. The products require different specialized machines, each costing $1.5 million. Each machine has a five-year life and zero residual value. The two products have different patterns of predicted net cash inflows: (Click the icon to view the data.) Calculate the toy action figure project's payback period. If the toy action figure project had a residual value of $125,000, would the payback period change? Explain and recalculate if necessary. Does this investment pass Playland's payback period screening rule? Calculate the toy action figure project's payback period. First enter the formula, then calculate the payback period. (Enter amounts in dollars, not millions. Round your answer to two decimal places.) Accounting rate of return Expected annual net cash inflow Payback period years If the toy action figure project had a residual value of $125,000, would the payback period change? Explain and recalculate if necessary. affected. The cash inflow from any residual value would occur the asset's useful operating life and taken into account when calculating If the investment had a $125,000 residual value, the payback period the payback period. (Round your answer to two decimal places.) Data Table The payback period if the toy action figure project had a residual value of $125,000 is years. Does this investment pass Playland's payback period screening rule? The payback period is 3.5 years, so it Playland's initial screening. Year Annual Net Cash Inflows Toy action figure Sandbox toy project project $ 317,750 $ 500,000 Year 1 Year 2 317,750 370,000 Year 3 317,750 320,000 Year 4 317.750 317,750 250,000 25,000 Year 5 $ 1,588,750 $ 1,465,000 Total Playland will consider making capital investments only if the payback period of the project is less than 3.5 years and the ARR exceeds 8%. Choose from any list or enter any number in the input fields and then continue to the next question. Print Done