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please solve all of them Payback comparisons Nova Products has a 4-year maximum acceptable payback period. The firm is considering the purchase of a new
please solve all of them
Payback comparisons Nova Products has a 4-year maximum acceptable payback period. The firm is considering the purchase of a new machine and must choose between two alternatives. The first machine requires an initial investment of $11,000 and generates annual after-tax cash inflows of $3,000 for each of the next 10 years. The second machine requires an initial investment of $25.000 and provides an annual cash inflow after taxes of $7,000 for 22 years a. Determine the payback period for each machine b. Comment on the acceptability of the machines, assuming that they are independent projects C. Which machine should the firm accept? Why? d. Do the machines in this problem illustrate any of the weaknesses of using payback? a. The payback penod for the first machine is_years. (Round to two decimal places) The payback pened for the second machine is years (Round to two decimal places.) b. Is the first machine acceptable? (Select the best answer below.) swer below.) O No Yes is the second machine acceptable? (Select the best answer below.) O O Yes No c. Based on their payback periods, which machine should the firm accept? (Select the best answer below) O A Machine 2 OB. Machine 1 OC Neither Click to select your answer(s) b. Comment on the acceplony UI e dis, au t iu Hupum c. Which machine should the firm accept? Why? d. Do the machines in this problem illustrate any of the weaknesses of using payback? a. The payback period for the first machine is years. (Round to two decimal places) The payback period for the second machine is years. (Round to two decimal places) b. Is the first machine acceptable? (Select the best answer below.) O NO O Yes Is the second machine acceptable? (Select the best answer below) O O Yes No c. Based on their payback periods, which machine should the firm accept? (Select the best answer below.) O A. Machine 2 OB. Machine 1 OC. Neither Click to select your answer(s). Payback comparisons Nova Products has a 4 your maximum acceptable payback period. The firm is considering the purchase of a new MENIPU SNU MUST RUUSU DUWUWU HAVE generates annual after tax cash inflows of $3,000 for each of the next 10 years. The second machine requires an initial investment of $25,000 and provides an annual cash inflow after taxes of $7,000 for 22 years a. Determine the payback period for each machine b. Comment on the acceptability of the machines, assuming that they are independent projects c. Which machine should the firm accept? Why? d. Do the machines in this problem illustrate any of the weaknesses of using payback? Is the second machine acceptable? (Select the best answer below.) Yes No O c. Based on their payback periods, which machine should the firm accept? (Select the best answer below) O A. Machine 2 OB. Machine 1 OC. Neither d. Do the machines in this problem illustrate any of the weaknesses of using payback? (Select the best answer below.) O A. Machine 2 has returns that last only 10 years while Machine 1 has 22 years of returns. Payback cannot consider this difference, it ignores all cash inflows beyond the payback period. OB, Machine 2 has returns that last 22 years while Machine 1 has only 10 years of returns. Payback considers only the first 10 years for each machine OC. Machine 2 has returns that last 22 years while Machine 1 has only 10 years of returns Payback considers this difference, it includes all cash inflows beyond the payback period OD. Machine 2 has returns that last 22 years while Machine 1 has only 10 years of returns Payback cannot consider this difference, it ignores all cash inflows beyond the payback period Click to select your answer(s). Type here to search
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