The management of Ritz Corporation is considering the purchase of a new machine costing $500,000 with no residual value The company's desired rate of return is 10%. In addition to the foregoing information, use the following data in determining the acceptability of this investment:

Year Net income Net cash flow

1 $100,000 $200,000

2 80,000 170,000

3 50,000 130,000

4 10,000 20,000

5 10,000 80,000

1. The cash payback period for this investment is: a) 5 years b) 3 years c) 2 years d) 4 years

2. Using partial present value tables, what is the next present value? a) $50,000 b) -$19,730 c) -$-16,810 d) $100,000