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provides an annual cash inflow of $6,000 for 28 years. a. Determine the payback period for each machine. b. Comment on the acceptability of the
provides an annual cash inflow of $6,000 for 28 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 buy? Why? d. Does this problem illustrate any of the payback method's weaknesses? a. The payback period for the first machine is The payback period for the second machine is b. Is the first machine acceptable? (Select the best answer below.) No Yes Is the second machine acceptable? (Select the best answer below.) Yes No c. Based on their payback periods, which machine should the firm accept? (Select the best answer below.) A. Machine 2 B. Machine 1 C. Neither years. (Round to two decimal places.) years. (Round to two decimal places.) Is the second machine acceptable? (Select the best answer below.) Yes No c. Based on their payback periods, which machine should the firm accept? (Select the best answer below.) A. Machine 2 B. Machine 1 C. Neither d. Does this problem illustrate any of the payback method's weaknesses? (Select the best answer below.) A. Machine 2 has returns that last only 11 years while Machine 1 has 28 years of returns. Payback cannot consider this difference; it ignores all cash inflows beyond the payback period. B. Machine 2 has returns that last 28 years while Machine 1 has only 11 years of returns. Payback considers only the first 11 years for each machine. C. Machine 2 has returns that last 28 years while Machine 1 has only 11 years of returns. Payback considers this difference; it includes all cash inflows beyond the payback period. D. Machine 2 has returns that last 28 years while Machine 1 has only 11 years of returns. Payback cannot consider this difference; it ignores all cash inflows beyond the payback period
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