Toy Universe Products is considering producing toy action figures and sandbox toys. The products require different specialized machines, each costing $1.1 million. Each machine has a five-year life and zero residual value. The two products have different patterns of predicted net cash inflows:

Calculate the sandbox toy project's payback period. If the sandbox toy project had a residual value of $ 125,000, would the payback period change? Explain and recalculate if necessary. Does this investment pass Toy Universe's payback period screening rule?

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i Data Table 1 Annual Net Cash Inflows Year Sandbox toy Toy action figure project project $ 1.. 305,450 $ 550,000 2. 305,450 360,000 3. 305,450 330,000 . . 4. 305,450 260,000 305,450 20,000 5.. $ 1,527,250 $ 1,520,000 Total Toy Universe will consider making capital investments only if the payback period of the project is less than 3.5 years and the ARR exceeds 8% Calculate the sandbox toy 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. Abbreviation used: Amt. = Amount.) ( ayback ( years If the sandbox toy project had a residual value of $125,000, would the payback period change? Explain and recalculate if necessary. If the investment had a $125,000 residual value, the payback period taken into account when calculating the payback period. affected. The cash inflow from any residual value would occur the asset's useful operating life and (Round your answer to two decimal places.) The payback period if the sandbox toy project had a residual value of $125,000 is years Does this investment pass Toy Universe's payback period screening rule? Toy Universe's initial screening The payback period is 3.5 years, so it First, enter the formula, then calculate the payback period. (Enter amounts in dollars, not millions. Round your answer to two decimal places. Abbreviation used: Amt. = Amount.) Payback + ) = + years Expected annual net cash inflow If the sandbox toy project had a residual value of $125,000, would the Future value ulate if necessary Projected net cash inflow in next year the asset If the investment had a $125,000 residual value, the payback period any residual value would occur Residual value Total net cash inflows (Round your answer to two decimal places.) Calculate the sandbox toy 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. Abbreviation used: Amt. = Amount.) / Payback = ( Amt. to complete recovery in next year years If the sandbox toy pr Initial investment the payback period change? Explain and recalculate if necessary. Residual value the asset If the investment hac od affected. The cash inflow from any residual value would occur Total net cash inflows (Round your answer to two decimal places.) roinct bod a rocidual vouo of $125 000 ic. Tho nosback noriod if tbo candh