QUESTION 37 Below is information from Clydesdale Corporation's records: Sales invested assets Operating expenses Desired minimum rate of return $4,600,000 $2,000,000 $3,600,000 7.096 What is Clydesdale Corporation's residual income? a. $960,000. b. $1,000,000. c. $860,000. d. $760,000 QUESTION 38 Hazard Company is considering the acquisition of a machine that costs $330,000. The machine is expected to have a six-year useful life, no residual value, annual net cash flows of $150.000 and an average annual operating income of $87.500. What is the estimated cash payback period for the machine? a. 3.8 years. 6.2.8 years. c. 2 years. d.2.2 years. QUESTION 39 Russo Corporation is considering the purchase of a new machine for $76,000. The machine would generate an annual cash flow of $25.000 per year for five years. At the end of five years, the machine would have no salvage value. The company's cost of capital is 12 percent. The present value of an annuity at 12 percent, n = 5 is 3.605. What is the net present value for the machine? a. $76,000. b. $6.915. c. $14.125. d. $7.686